COPD is a complex syndrome that poses a serious health threat to >1.1 billion smokers worldwide. The stable disease is punctuated by episodes of acute exacerbation, which are predominantly the result of viral and bacterial infections. Despite their devastating health impact, mechanisms underlying disease exacerbations remain poorly understood. Mounting evidence suggests that cigarette smoke profoundly affects the immune system, compromising the host’s ability to mount appropriate immune and inflammatory responses against microbial agents. This review highlights recent advances in our understanding of the impact of cigarette smoke on type 1 interferon and IL-1 signaling cascades. The immune defects caused by cigarette smoke on these two key pathways contribute to the seemingly contradictory nature of cigarette smoke as both a damaging and a proinflammatory factor as well as an immunosuppressive factor. Understanding the impact of cigarette smoke on the immune system may unravel novel targets for therapies that could affect acute exacerbations and COPD pathogenesis.