Abstract Chronic inflammation is a major driver of lung cancer and contributes to its pathogenesis by inducing genetic and epigenetic alterations. These, in turn, modulate the microenvironment to facilitate emergence of tumor promoting immune evasive mechanisms. The evolution of epigenetic events and their role, both alone, and in association with lung cancer specific genetic drivers in initiation of lung cancer is not well delineated. Specific pathological subtypes of non-small cell lung cancer (NSCLC) have distinct cells of origin, suggestive of cell type-specific changes in driving their development. We employed lung organoid models with chronic exposure to cigarette smoke condensate (CSC) to elucidate sequential, cell type-specific epigenetic and transcriptomic alterations and their role in co-operating with genetic events to drive development of NSCLC. We examined epigenomic and transcriptomic alterations over a 6-month exposure period by DNA methylation arrays, ATAC-seq, and RNA-seq. We observe that CSC exposure causes distinct morphological changes in organoid structure and composition, accompanied by an increase in proliferative potential. Using flow cytometry and immunofluorescent staining approaches, we demonstrate a chronic inflammation-driven shift in stem cell populations accompanied by reduction in differentiated cell types. Bulk and single-cell RNA sequencing approaches identified distinct temporal changes in transcriptional signatures in CSC exposed organoids suggestive of evolution of an immune evasive and pro-tumorigenic phenotype. Gene set enrichment analysis revealed a downregulation of interferon signaling and upregulation of Myc targets and oxidative phosphorylation pathways in CSC treated organoids. Notably, co-culturing organoids with key immune cell populations, demonstrate the ability of the CSC exposed organoids to modulate shifts in immune cells from a pro- to anti- inflammatory state. In accordance with this shift in immune cell phenotype, CSC treated organoids secreted decreased levels of pro-inflammatory cytokines as measured by multiplex ELISA assays. Genome wide DNA methylation analysis reveal that CSC methylated genes were associated with differentiation and cell fate commitment as well as transcription factor activity. Finally, we demonstrate that introduction of key NSCLC-specific driver events at the 6-month time point sensitize only CSC treated organoids to tumor formation in vivo, leading to the development of distinct genetic driver-specific subtypes of NSCLC. Altogether, our results demonstrate the ability of chronic inflammation to drive key cell type-specific transcriptomic and epigenetic changes leading to the development of distinct subtypes of NSCLC. Our findings will help identify molecular correlates for early detection and aid development of novel therapeutic strategies for disease interception. Citation Format: Na Wang, Kara Lombardo, Raksha Padaki, Ray-Whay Chiu Yen, Malcolm V. Brock, Leslie Cope, Hariharan Easwaran, Stephen B. Baylin, Michelle Vaz. Characterizing inflammation-induced epigenetic and transcriptomic alterations driving NSCLC using lung organoid models [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2024; Part 1 (Regular Abstracts); 2024 Apr 5-10; San Diego, CA. Philadelphia (PA): AACR; Cancer Res 2024;84(6_Suppl):Abstract nr 1463.