Phenotypic alterations in the lung epithelium have been widely implicated in chronic obstructive pulmonary disease (COPD) pathogenesis, but the precise mechanisms orchestrating this persistent inflammatory process remain unknown because of the complexity of lung parenchymal and mesenchymal architecture. To identify cell type–specific mechanisms and cell–cell interactions among the multiple lung resident cell types and inflammatory cells that contribute to COPD progression, we profiled 57,918 cells from lungs of patients with COPD, smokers without COPD, and never-smokers using single-cell RNA sequencing technology. We predicted pseudotime of cell differentiation and cell-to-cell interaction networks in COPD. Although epithelial components in never-smokers were relatively uniform, smoker groups represent extensive heterogeneity in epithelial cells, particularly in alveolar type 2 (AT2) clusters. Among AT2 cells, which are generally regarded as alveolar progenitors, we identified a unique subset that increased in patients with COPD and specifically expressed a series of chemokines including CXCL1 and CXCL8. A trajectory analysis revealed that the inflammatory AT2 cell subpopulation followed a unique differentiation path, and a prediction model of cell-to-cell interactions inferred significantly increased intercellular networks of inflammatory AT2 cells. Our results identify previously unidentified cell subsets and provide an insight into the biological and clinical characteristics of COPD pathogenesis.