The incidence of finding evidence of both emphysema and pulmonary fibrosis in the same patient has received increased attention. Several investigators have found on biopsy the presence of emphysema of the upper zones and diffuse parenchymal disease with fibrosis of the lower zones of the lung, especially associated with current or previous heavy smokers. Believed previously to be two different disease mechanisms, there are now data to implicate some common pathways of cell and molecular activation leading to the different morphologic and physiologic outcomes. According to a current view, emphysema may originate from a protease/antiprotease imbalance, whereas a role for antiproteases has been proposed in the modulation of fibrosis. Overexpression of transforming growth factor β (TGF-β) in experimental rodent models leads to progressive pulmonary fibrosis, accompanied with marked up-regulation of protease inhibitors, such as tissue inhibitor of metalloproteinases (TIMP) and plasminogen activator inhibitor-1 (PAI-1) genes, along with excessive matrix accumulation. It may be that a “matrix degrading” pulmonary microenvironment, one in which metalloproteinase activities prevail, favors the development of emphysema, whereas a “matrix nondegrading” microenvironment, with enhanced presence of TIMPs, would lead to matrix accumulation and fibrosis. Surprisingly, although Smad3 null mice, deficient in TGF-β signal transmission, are resistant to bleomycin- and TGF-β–mediated fibrosis, they develop spontaneous age-related airspace enlargement, consistent with emphysema, with a lack of ability to repair tissue damage appropriately. A common element is tissue damage and repair, with TGF-β and the Smad signaling pathway playing prominent molecular roles. Both changes can be followed in experimental models with noninvasive imaging and physiologic measurements.