RATIONALE: Peripheral airway obstruction is a key feature of chronic obstructive pulmonary disease (COPD), but the mechanisms of airway loss are unknown. This study aims to identify the molecular and cellular mechanisms associated with peripheral airway obstruction in COPD. METHODS: Ten explanted lung specimens donated by patients with very-severe COPD treated by lung transplantation and 5 unused donor control lungs were sampled using systematic uniform random sampling (SURS) resulting in 240 samples. These samples were further examined by micro-CT, quantitative histology, and gene expression profiling. RESULTS: The micro-CT analysis showed that the loss of terminal bronchioles in COPD occurs in regions of microscopic emphysematous destruction with an average airspace size of ≥500<1000 µm, which we have termed a "hot spot". Based on Microarray gene expression profiling, the "hot spot" was associated with an 11 gene signature, the up-regulation of pro-inflammatory genes, and the down-regulation of inhibitory immune checkpoint genes, indicating immune response activation. Results from both quantitative histology and the bioinformatics computational tool CIBERSORT which predicts the percentage of immune cells in tissues from transcriptomic data showed that the "hot spot" regions were associated with increased infiltration of CD4, CD8, and B cell lymphocytes. INTERPRETATION: The reduction in terminal bronchioles observed in lungs from patients with COPD occurs in a "hot spot" of microscopic emphysema, where there is upregulation of IFNG signaling, costimulatory immune checkpoint genes, genes related to the inflammasome pathway, and increased infiltration of immune cells, profiles which could be potential targets for therapeutic interventions in COPD.