Recent evidence has demonstrated that mucin 1 (MUC1) is involved in many pathological processes that occur in the lung. MUC1 is a transmembrane protein mainly expressed by epithelial and hematopoietic cells. It has a receptor-like structure, which can sense the external environment and activate intracellular signal transduction pathways through its cytoplasmic domain. The extracellular domain of MUC1 can be released to the external environment, thus acting as a decoy barrier to mucosal pathogens, as well as serving as a serum biomarker for the diagnosis and prognosis of several respiratory diseases such as lung cancer and interstitial lung diseases. Furthermore, bioactivated MUC1-cytoplasmic tail (CT) has been shown to act as an anti-inflammatory molecule in several airway infections and mediates the expression of anti-inflammatory genes in lung diseases such as chronic rhinosinusitis, chronic obstructive pulmonary disease and severe asthma. Bioactivated MUC1-CT has also been reported to interact with several effectors linked to cellular transformation, contributing to the progression of respiratory diseases such as lung cancer and pulmonary fibrosis. In this review, we summarise the current knowledge of MUC1 as a promising biomarker and drug target for lung disease.