Lung hyperinflation commonly accompanies expiratory flow-limitation in patients with Chronic Obstructive Pulmonary Disease (COPD) and contributes importantly to dyspnea and activity limitation. It is not surprising, therefore, that lung hyperinflation has become an important therapeutic target in symptomatic COPD patients. There is increasing evidence that acute dynamic increases in lung hyperinflation, under conditions of worsening expiratory flow-limitation and increased ventilatory demand (or both) can seriously stress cardiopulmonary reserves, particularly in patients with more advanced disease. Our understanding of the physiological mechanisms of dynamic lung hyperinflation during both physical activity and exacerbations in COPD continues to grow, together with an appreciation of its serious negative mechanical and sensory consequences. In this review, we will discuss the basic pathophysiology of COPD during rest, exercise and exacerbation so as to better understand how this can be pharmacologically manipulated for the patient's benefit. Finally, we will review current concepts of the mechanisms of symptom relief and improved exercise endurance following pharmacological lung volume reduction.