Chronic obstructive pulmonary disease (COPD) is a complex, heterogeneous disease. The severity of airflow limitation, traditionally used to guide therapy in patients with COPD, does not describe this complexity properly. As a result, over the past few years there has been a great deal of interest in characterizing COPD more precisely and identifying homogeneous groups of patients who respond to specific therapeutic interventions (i.e., phenotypes). This review summarizes a presentation at the Transatlantic Airway Conference held in Lucerne on January 31, 2013 on this topic. It addresses the following questions: (1) What do we mean by "phenotypes"? (2) Why do we care about them? (3) Are phenotypes the best strategy to understand COPD heterogeneity? and (4) How can we progress in this field?