Rationale: Hereditary surfactant protein-B deficiency is an autosomal recessive disorder that causes fatal respiratory distress syndrome in newborns. Seventy percent of the cases of hereditary surfactant protein-B deficiency are caused by homozygosity for the 121ins2 mutation in the surfactant protein-B gene. Individuals heterozygous for this mutation have partial absence of surfactant protein-B and could be at risk of lung disease when exposed to additional risk factors for impaired surfactant function such as tobacco smoking. Objectives: To test whether individuals heterozygous for the 121ins2 mutation have reduced lung function and increased risk for chronic obstructive pulmonary disease (COPD) among smokers. Methods: We genotyped 47,600 individuals from the adult Danish general population and recorded smoking habits, spirometry and hospital admissions due to COPD. The study and findings are limited to Danes/Europeans. Measurements and Main Results: We identified 85 individuals heterozygous for the 121ins2 mutation. Smoking interacted statistically with the 121ins2 genotype in predicting FEV₁%predicted(p=0.006), FVC%predicted(p=0.02) and FEV₁/FVC(p=0.002), indicating that the effect of genotype differ by smoking status. Among smokers, 121ins2 heterozygotes had 9% reduced FEV₁%predicted(p=0.0008), 6% reduced FVC%predicted(p=0.01) and 6% reduced FEV₁/FVC(p=0.00007), compared with wildtypes. Also among smokers, 121ins2 heterozygotes had odds ratios of 2.4(95%CI 1.2-4.8) for spirometry defined COPD and of 2.2(1.0-5.1) for hospitalization due to COPD. Among never smokers, 121ins2 heterozygotes did not differ from wildtypes in lung function or risk of COPD. Conclusions: Surfactant protein-B 121ins2 heterozygosity is associated with reduced lung function and increased risk for COPD among smokers.