Cigarette smoking is the primary cause of the irreversible lung disease emphysema. Historically, inflammatory cells such as macrophages and neutrophils have been studied for their role in emphysema pathology. However, recent studies indicate that the lung epithelium is an active participant in emphysema pathogenesis and plays a critical role in the lung's response to cigarette smoke. Tobacco smoke increases protease production and alters cytokine expression in isolated epithelial cells, suggesting that these cells respond potently even in the absence of a complete inflammatory program. Tobacco smoke also acts as an immunosuppressant, reducing the defense function of airway epithelial cells and enhancing colonization of the lower airways. Thus, the paradigm that emphysema is strictly an inflammatory-cell based disease is shifting to consider the involvement of resident epithelial cells. Here we review the role of epithelial cells in lung development and emphysema. To better understand tobacco-epithelial interactions we performed microarray analyses of RNA from human airway epithelial cells exposed to smoke extract for 24 hours. These studies identified differential regulation of 425 genes involved in diverse biological processes, such as apoptosis, immune function, cell cycle, signal transduction, proliferation, and antioxidants. Some of these genes, including VEGF, glutathione peroxidase, IL-13 receptor, and cytochrome P450, have been previously reported to be altered in the lungs of smokers. Others, such as pirin, cathepsin L, STAT1, and BMP2, are shown here for the first time to have a potential role in smoke-associated injury. These data broaden our understanding of the importance of epithelial cells in lung health and cigarette smoke-induced emphysema.