Chronic obstructive pulmonary disease (COPD) is a highly prevalent, chronic inflammatory lung disease with limited existing therapeutic options. While modulation of peroxisome proliferator-activating receptor (PPAR)-γ activity can modify inflammatory responses in several models of lung injury, the relevance of the PPARG pathway in COPD pathogenesis has not been previously explored. Mice lacking Pparg specifically in airway epithelial cells displayed increased susceptibility to chronic cigarette smoke (CS)-induced emphysema, with excessive macrophage accumulation associated with increased expression of chemokines, Ccl5, Cxcl10, and Cxcl15. Conversely, treatment of mice with a pharmacological PPARγ activator attenuated Cxcl10 and Cxcl15 expression and macrophage accumulation in response to CS. In vitro, CS increased lung epithelial cell chemokine expression in a PPARγ activation-dependent fashion. The ability of PPARγ to regulate CS-induced chemokine expression in vitro was not specifically associated with peroxisome proliferator response element (PPRE)-mediated transactivation activity but was correlated with PPARγ-mediated transrepression of NF-κB activity. Pharmacological or genetic activation of PPARγ activity abrogated CS-dependent induction of NF-κB activity. Regulation of NF-κB activity involved direct PPARγ-NF-κB interaction and PPARγ-mediated effects on IKK activation, IκBα degradation, and nuclear translocation of p65. Our data indicate that PPARG represents a disease-relevant pathophysiological and pharmacological target in COPD. Its activation state likely contributes to NF-κB-dependent, CS-induced chemokine-mediated regulation of inflammatory cell accumulation.