Changes in the structure and function of the small airways (<2mm diameter) are now recognized to play a major role in airflow limitation in both chronic obstructive pulmonary disease (COPD) and severe asthma. Increased thickness of the small airway wall causes lumenal narrowing, which can be further occluded by mucus and/or inflammatory cell exudate. This leads to increased peripheral resistance, air trapping and shortness of breath on exertion. Studies in animal models and in subjects with COPD have suggested that oxidant-driven transforming growth factor (TGF)-β1 activation and subsequent increased airway wall collagen synthesis might be central to the changes in small airway structure. However, it remains difficult to measure small airway function in patients, and delivery of inhaled drugs to peripheral airways has not yet been optimised. The increased understanding of the processes underlying the development of small airways disease should facilitate pharmacological intervention targeted at this hitherto neglected compartment.