Exercise limitation is common in chronic obstructive pulmonary disease (COPD). We determined the impact of pulmonary emphysema on the physiological response to exercise independent of contemporary measures of COPD severity. Smokers 40-79 years old with COPD underwent computed tomography, pulmonary function tesing, and symptom-limited incremental exercise testing. COPD severity was quantified according to the Global Initiative for Chronic Obstructive Lung Disease (GOLD) by spirometry (GOLD 1-4); and symptom burden and exacerbation risk (GOLD A-D). Emphysema severity was quantified as the percent lung volume <-950 Hounsfield units. Regression models adjusted for age, gender, body size, smoking status, airflow limitation, symptom burden and exacerbation risk. Among 67 COPD subjects (age 67 ± 8 years; 75% male; GOLD 1-4: 11%, 43%, 30%, 16%), median percent emphysema was 11%, and peak power output (PPO) was 61 ± 32 W. Higher percent emphysema independently predicted lower PPO (-24 W per 10% increment in emphysema; 95%CI -41 to -7 W). Throughout exercise, higher percent emphysema predicted 1) higher minute ventilation, ventilatory equivalent for CO2, and heart rate; and 2) lower oxy-hemoglobin saturation, and end-tidal PCO2. Independent of contemporary measures of COPD severity, the extent of pulmonary emphysema predicts lower exercise capacity, ventilatory inefficiency, impaired gas-exchange and increased heart rate response to exercise.