Chronic obstructive pulmonary disease (COPD) affects more than 200 million people worldwide and is expected to become the third leading cause of death in 2020. COPD is characterized by progressive airflow limitation, due to a combination of chronic inflammation and remodeling of the small airways (bronchiolitis) and loss of elastic recoil caused by destruction of the alveolar walls (emphysema). Lung cancer is the most important cause of cancer-related death in the world. (Cigarette) smoking is the principal culprit causing both COPD and lung cancer; in addition, exposure to environmental tobacco smoke, biomass fuel smoke, coal smoke and outdoor air pollution have also been associated with an increased incidence of both diseases. Importantly, smokers with COPD – defined as either not fully reversible airflow limitation or emphysema – have a two- to four-fold increased risk to develop lung cancer. In this review, we highlight several of the genetic, epigenetic and inflammatory mechanisms, which link COPD and carcinogenesis in the lungs. Elucidating the biological pathways and networks, which underlie the increased susceptibility of lung cancer in patients with COPD, has important implications for screening, prevention, diagnosis and treatment of these two devastating pulmonary diseases.