The immuno-modulatory properties of airway smooth muscle have become of increasing importance in our understanding of the mechanisms underlying chronic inflammation and structural remodeling of the airway wall in asthma and chronic obstructive pulmonary disease (COPD). ASM cells respond to many cytokines, growth factors and lipid mediators to produce a wide array of immuno-modulatory molecules which may in turn orchestrate and perpetuate the disease process in asthma and COPD. Despite numerous studies of the cellular effects of cytokines on cultured ASM, few have identified intracellular signaling pathways by which cytokines modulate or induce these cellular responses. In this review we provide an overview of the transcriptional mechanisms as well as intracellular signaling pathways regulating cytokine functions in ASM cells. The recent discovery of toll-like receptors in ASM cells represents a significant development in our understanding of the immuno-modulatory capabilities of ASM cells. Thus, we also review emerging evidence of the inflammatory response to toll-like receptor activation in ASM cells.