Cigarette smoke (CS) is the leading risk factor to develop COPD. Therefore, the pathologic effects of whole CS on the differentiation of primary small airway epithelial cells (SAEC) were investigated, using cells from three healthy donors and three COPD patients, cultured under ALI (air-liquid interface) conditions. The analysis of the epithelial physiology demonstrated that CS impaired barrier formation and reduced cilia beat activity. Although, COPD-derived ALI cultures preserved some features known from COPD patients, CS-induced effects were similarly pronounced in ALI cultures from patients compared to healthy controls. RNA sequencing analyses revealed the deregulation of marker genes for basal and secretory cells upon CS exposure. The comparison between gene signatures obtained from the in vitro model (CS vs. air) with a published data set from human epithelial brushes (smoker vs. non-smoker) revealed a high degree of similarity between deregulated genes and pathways induced by CS. Taken together, whole cigarette smoke alters the differentiation of small airway basal cells in vitro. The established model showed a good translatability to the situation in vivo. Thus, the model can help to identify and test novel therapeutic approaches to restore the impaired epithelial repair mechanisms in COPD, which is still a high medical need.