The airway epithelium of smokers acquires pathological phenotypes, including basal cell (BC) and/or goblet cell hyperplasia, squamous metaplasia, structural and functional abnormalities of ciliated cells, decreased number of secretoglobin (SCGB1A1)-expressing secretory cells, and a disordered junctional barrier. In this study, we hypothesized that smoking alters airway epithelial structure through modification of BC function via an EGF receptor (EGFR)-mediated mechanism. Analysis of the airway epithelium revealed that EGFR is enriched in airway BCs, whereas its ligand EGF is induced by smoking in ciliated cells. Exposure of BCs to EGF shifted the BC differentiation program toward the squamous and epithelial-mesenchymal transition-like phenotypes with down-regulation of genes related to ciliogenesis, secretory differentiation, and markedly reduced junctional barrier integrity, mimicking the abnormalities present in the airways of smokers in vivo. These data suggest that activation of EGFR in airway BCs by smoking-induced EGF represents a unique mechanism whereby smoking can alter airway epithelial differentiation and barrier function.