Chronic obstructive pulmonary disease (COPD) is characterized by an accelerated decline in lung function and progressive airway inflammation. Bacteria have been isolated from the lower airway of stable COPD patients, and airway inflammation has been related to bacterial load and type. The relationship between bacterial colonization, airway inflammation, and lung function decline remains uncertain. We studied 30 patients with COPD, mean (SD) FEV₁ 0.947 (0.329), 34.8% (13.6%) predicted, for 12 months. Sputum collected at recruitment and the end of the study was analyzed for cytokines and for quantitative bacteriology. The decline in FEV₁ was 57.6 (137.6) ml year⁻¹. Bacterial growth was identified in all subjects, with an initial count of 10^7.47(0.91) cfu ml⁻¹ rising to 10^7.93(0.81) cfu ml⁻¹ at the end of the study (p = 0.019). FEV₁ decline was related to this increase in airway bacterial load (r = 0.59, p = 0.001). FEV₁ decline was greater in subjects who exhibited a change in the colonizing bacterial type compared with those with persistence of a single bacterial species over the study period (p = 0.017). Higher sputum interleukin (IL-8) was associated with greater declines in FEV₁ (p = 0.03). Rising airway bacterial load and species changes are associated with greater airway inflammation and accelerated decline in FEV₁. Bacterial colonization in COPD is an important factor in disease progression.