Asthma is characterized in part by reversible airflow obstruction, hyperresponsiveness, and inflammation. Chronic obstructive pulmonary disease, which includes chronic bronchitis, emphysema, and possibly bronchiectasis, is defined as predominantly irreversible airflow obstruction associated with abnormal airway inflammation. Traditional concepts concerning airway inflammation have focused on trafficking leukocytes and on the effects of inflammatory mediators, cytokines, and chemokines secreted by these cells. Airway smooth muscle, the major effector cell responsible for bronchomotor tone, has been viewed as a target tissue responding to neurohumoral control and inflammatory mediators. New evidence, however, suggests that airway smooth muscle may secrete cytokines and chemokines and express cellular adhesion molecules that are important in modulating submucosal airway inflammation. Other new evidence suggests that beta-adrenergic agents may inhibit some but not all of the inflammatory responses. In certain circumstances, increasing levels of cyclic adenosine monophosphate in the cytosol of airway smooth muscle promote the secretion of other cytokines or chemokines. The cellular and molecular mechanisms that regulate the immunomodulatory functions of airway smooth muscle may offer new and important therapeutic targets in treating these common lung diseases.