The authors have reviewed the current literature on airway inflammation and remodeling in smoking-related chronic obstructive pulmonary disease (COPD). Detailed data on airway remodeling in COPD are especially sparse and how these changes lead to decline in lung function is not well understood. Small airway fibrosis and obliteration are likely to be the main contributors to physiological airway dysfunction and occur earlier than any subsequent development of emphysema. One potential mechanism contributing to small airway fibrosis/obliteration and change in extracellular matrix is epithelial-mesenchymal transition. When associated with angiogenesis (so-called epithelial-mesenchymal transition type 3) it may well also be the link with the development of cancer, which is closely associated with COPD, predominantly in large airways. The authors have focused on our recent publications in these areas. Further investigations teasing out these mechanisms will help improve our understanding of key airway disease processes in COPD, which may have major therapeutic implications.