We assessed whether spirometric measurements are associated with the development of accelerated FEV₁ decline and lung cancer among active and previous smokers with a wide range of lung function. Bivariate and multivariate analyses that adjusted for age, intervention arm, smoking status at enrollment and smoking history, years exposed to asbestos, and evidence of asbestosis were used to assess whether baseline FEV₁ and FEV₁/FVC ratio were associated with accelerated FEV₁ decline and incident lung cancer. The 3,041 participants enrolled from 1985 to 1994 were followed through April 30, 2005. Baseline FEV₁/FVC ratio < 0.7 was significantly associated with an increased risk for rapid lung function decline (OR = 1.73; 95% CI 1.31-2.28; p < 0.001). Baseline FEV₁/FVC ratio < 0.7 was also significantly associated with an increased risk of developing lung cancer, even when baseline FEV₁ was > 80%. Lung cancer risk among participants with baseline airflow obstruction and FEV₁ < 60% was 4-fold higher than participants without baseline airflow obstruction and FEV₁ > 80% (p < 0.001), even among former smokers. These data indicate an FEV₁/FVC < 0.7 among smokers is significantly associated with faster airflow loss, and an increased risk for developing lung cancer, even among those individuals with a normal FEV₁.