During the last two decades, great strides have been made in our understanding of the functional aspects of airflow in the periphery of the lung. It seems that the small airways are the important site of obstruction in a variety of chronic respiratory disorders associated with airflow obstruction. This review deals with the anatomic and functional aspects of small airways in normal and diseased lungs. In particular, the basis of obstruction or narrowing that is not dependent on intrinsic airway lesion is reviewed. The variety of pathologic changes in small airways observed in these diseases are outlined along with physiologic tests that are currently used to detect dysfunction at a stage long before they produce symptoms or alter standard tests of lung function.