Noble gas pulmonary magnetic resonance imaging (MRI) is transitioning away from ³He to ¹²⁹Xe gas, but the physiological/clinical relevance of ¹²⁹Xe apparent diffusion coefficient (ADC) parenchyma measurements is not well understood. Therefore, our objective was to generate ¹²⁹Xe MRI ADC for comparison with ³He ADC and with well‐established measurements of alveolar structure and function in older never‐smokers and ex‐smokers with chronic obstructive pulmonary disease (COPD). In four never‐smokers and 10 COPD ex‐smokers, ³He (b = 1.6 sec/cm²) and ¹²⁹Xe (b = 12, 20, and 30 sec/cm²) ADC, computed tomography (CT) density‐threshold measurements, and the diffusing capacity for carbon monoxide (DL_CO) were measured. To understand regional differences, the anterior–posterior (AP_G) and superior–inferior (∆SI) ADC differences were evaluated. Compared to never‐smokers, COPD ex‐smokers showed greater ³He ADC (P = 0.006), ¹²⁹Xe ADC_b12 (P = 0.006), and ADC_b20 (P = 0.006), but not for ADC_b30 (P > 0.05). Never‐smokers and COPD ex‐smokers had significantly different AP_G for ³He ADC (P = 0.02), ¹²⁹Xe ADC_b12 (P = 0.006), and ADC_b20 (P = 0.01), but not for ADC_b30 (P > 0.05). ∆SI for never‐ and ex‐smokers was significantly different for ³He ADC (P = 0.046), but not for ¹²⁹Xe ADC (P > 0.05). There were strong correlations for DL_CO with ³He ADC and ¹²⁹Xe ADC_b12 (both r = −0.95, P < 0.05); in a multivariate model ¹²⁹Xe ADC_b12 was the only significant predictor of DL_CO (P = 0.049). For COPD ex‐smokers, CT relative area <−950 HU (RA₉₅₀) correlated with ³He ADC (r = 0.90, P = 0.008) and ¹²⁹Xe ADC_b12 (r = 0.85, P = 0.03). In conclusion, while ¹²⁹Xe ADC_b30 may be appropriate for evaluating subclinical or mild emphysema, in this small group of never‐smokers and ex‐smokers with moderate‐to‐severe emphysema, ¹²⁹Xe ADC_b12 provided a physiologically appropriate estimate of gas exchange abnormalities and alveolar microstructure.