Inhaled corticosteroids (ICS) are effective in the treatment of asthma and markedly reduce the numbers of inflammatory cells in bronchial biopsies. However, the effect of ICS on the inflammatory profile of biopsies in smokers with chronic obstructive pulmonary disease (COPD) is unknown. We have performed a double-blind, placebo-controlled, randomized study to compare fluticasone propionate (FP) 500 microg twice daily via a dry powder inhaler and placebo (P) over a 3-month period in subjects with COPD. Fiberoptic bronchoscopy and bronchial biopsy was carried out at baseline and after the 3 months of treatment. Thirty-one subjects completed the trial and 30 paired biopsies were available for analysis. Compared with P (n = 14), subjects on inhaled FP (n = 16) had no significant reductions in the primary endpoints: CD8+, CD68+ cells, or neutrophils, considered to be of importance in COPD. However, there was a reduction in the CD8:CD4 ratio in the epithelium and of the numbers of subepithelial mast cells in the FP group. CD4+ cells were significantly raised in the P group in both subepithelium and epithelium. Symptoms significantly improved, and there were significantly fewer exacerbations in subjects on FP, compared to subjects on P. The data indicate that inhaled fluticasone does affect selected aspects of airway inflammation in COPD, and this may explain, in part, the decrease in exacerbations seen in long-term studies with fluticasone propionate.