The effect of smoking cessation or modification on lung function was determined during a 48-week period. In a large number of the cigarette smokers, a disturbance of lung function was not revealed by conventional tests, such as the 1-sec forced expiratory volume; however, an abnormality was often demonstrable in tests that may reflect alterations in small airways, such as closing volume and Phase III of the single-breath expired N2 curve. There was no relation between the degree of abnormality of lung function and the presence of respiratory symptoms, but there appeared to be a relationship to lifetime smoking history, the heaviest smokers having the poorest function. Cessation, or more than 25 per cent decrease in the number of cigarettes smoked, was attened by improvement in the slope of Phase III of the N2 washout curve, closing volume, and closing capacity, as well as forced vital capacity, 1-sec forced expiratory volume, and peak flow. Resumption of smoking after cessation was attended by a deterioration in the slope of Phase III and closing capacity. The data suggest that the functional abnormalities in smokers are related to smoking and are at least partially reversible by cessation or significant modification of the smoking habit.