Chronic obstructive pulmonary disease (COPD) is a lethal progressive lung disease culminating in permanent airway obstruction and alveolar enlargement. Previous studies suggest CTL involvement in COPD progression; however, their precise role remains unknown. Here, we investigated whether the CTL activation receptor NK cell group 2D (NKG2D) contributes to the development of COPD. Using primary murine lung epithelium isolated from mice chronically exposed to cigarette smoke and cultured epithelial cells exposed to cigarette smoke extract in vitro, we demonstrated induced expression of the NKG2D ligand retinoic acid early transcript 1 (RAET1) as well as NKG2D-mediated cytotoxicity. Furthermore, a genetic model of inducible RAET1 expression on mouse pulmonary epithelial cells yielded a severe emphysematous phenotype characterized by epithelial apoptosis and increased CTL activation, which was reversed by blocking NKG2D activation. We also assessed whether NKG2D ligand expression corresponded with pulmonary disease in human patients by staining airway and peripheral lung tissues from never smokers, smokers with normal lung function, and current and former smokers with COPD. NKG2D ligand expression was independent of NKG2D receptor expression in COPD patients, demonstrating that ligand expression is the limiting factor in CTL activation. These results demonstrate that aberrant, persistent NKG2D ligand expression in the pulmonary epithelium contributes to the development of COPD pathologies.