It is unknown what proportion of long-term lung function decline in cystic fibrosis (CF) is explained by pulmonary exacerbations. The aim of this study was to determine how exacerbations requiring hospitalisation contribute to the course of CF lung disease. This was a retrospective cohort study. The primary outcome was the rate of decline of forced expiratory volume in 1 s (FEV(1)) % predicted. Out of 851 subjects, 415 (48.8%) subjects had ≥ 1 exacerbation. After adjustment for confounders, the annual rate of FEV(1) decline in those without an exacerbation was 1.2% per yr (95% CI 1.0-1.5), compared with 2.5% per yr (95% CI 2.1-2.8) in those with an exacerbation. The proportion of overall FEV(1) decline associated with ≥ 1 exacerbation was 52% (95% CI 35.0-68.9). For a given number of exacerbations, the annual rate of FEV(1) decline was greatest in subjects with ≤ 6 months between exacerbations. Half of FEV(1) decline seen in CF patients was associated with pulmonary exacerbations. Time between exacerbations, specifically ≤ 6 months between exacerbations, plays an important contribution to overall lung function decline. These findings support using time to next exacerbation as a clinical end-point for CF trials.