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Abstract Background The small airway epithelium (SAE), the cell population that covers the human airway surface from the 6th generation of airway branching to the alveoli, is the major site of lung disease caused by smoking. The focus of this study is to provide quantitative assessment of the SAE transcriptome in the resting state and in response to chronic cigarette smoking using massive parallel mRNA sequencing (RNA-Seq). Results The data demonstrate that 48% of SAE expressed genes are ubiquitous, shared with many tissues, with 52% enriched in this cell population. The most highly expressed gene, SCGB1A1, is characteristic of Clara cells, the cell type unique to the human SAE. Among other genes expressed by the SAE are those related to Clara cell differentiation, secretory mucosal defense, and mucociliary differentiation. The high sensitivity of RNA-Seq permitted quantification of gene expression related to infrequent cell populations such as neuroendocrine cells and epithelial stem/progenitor cells. Quantification of the absolute smoking-induced changes in SAE gene expression revealed that, compared to ubiquitous genes, more SAE-enriched genes responded to smoking with up-regulation, and those with the highest basal expression levels showed most dramatic changes. Smoking had no effect on SAE gene splicing, but was associated with a shift in molecular pattern from Clara cell-associated towards the mucus-secreting cell differentiation pathway with multiple features of cancer-associated molecular phenotype. Conclusions These observations provide insights into the unique biology of human SAE by providing quantit-ative assessment of the global transcriptome under physiological conditions and in response to the stress of chronic cigarette smoking.