Peroxisome proliferator–activated receptors (PPARs) are members of the nuclear hormone receptor superfamily and have antiinflammatory and immunomodulatory properties. PPAR-γ is expressed in many lung cell types, including epithelial cells and fibroblasts. Studies using PPAR-γ agonists have revealed that this isoform plays a role in both lung inflammation and pulmonary fibrosis, raising the possibility that PPAR-γ agonists may have potential in the treatment of lung diseases, including chronic obstructive pulmonary disease (COPD). Although it has been shown that cigarette smoke extract (CSE) reduces nuclear levels of activated PPAR-γ in a monocyte-macrophage cell line, the effects of CSE on PPAR-γ activation in pulmonary epithelial cells remains unexplored. We hypothesized that CSE exposure suppresses PPAR-γ expression and activation in pulmonary epithelial cells. Using a transcription factor enzyme-linked immunosorbent assay, we demonstrated that nuclear PPAR-γ activity was decreased by approximately 50% in a mouse lung epithelial cell line (LA-4) compared with controls following 3 hours of 10% CSE exposure. By 6 hours after CSE exposure, PPAR-γ mRNA expression, as measured by quantitative PCR, was also significantly decreased. Addition of the PPAR-γ agonist pioglitazone (10 μM) attenuated CSE-induced NF-κB activation linking PPAR-γ suppression to CSE-mediated inflammation. These findings indicate that suppression of PPAR-γ following cigarette smoke exposure may contribute to the pathogenesis of COPD in the lungs of smokers.