Background: Chronic obstructive pulmonary disease (COPD) and tobacco use are leading causes of morbidity and mortality. The prevalence and clinical impact of COPD on mortality and kidney transplantation among patients who begin dialysis therapy is unclear. Methods: We explored the clinical impact of COPD and continued tobacco use on overall mortality and kidney transplantation in a national cohort study of US dialysis patients. National data on all dialysis patients (n = 769,984), incident between May 1995 and December 2004 and followed until October 31, 2006, were analyzed from the United States Renal Data System. Prevalence and period trends were determined while multivariable Cox regression evaluated relative hazard ratios (RR) for death and kidney transplantation. Results: The prevalence of COPD was 7.5% overall and increased from 6.7 to 8.1% from 1995–2004. COPD correlated significantly with older age, cardiovascular conditions, cancer, malnutrition, poor functional status, and tobacco use. Adjusted mortality risks were significantly higher for patients with COPD (RR = 1.20, 95% CI 1.18–1.21), especially among current smokers (RR = 1.28, 95% CI 1.25–1.32), and varied inversely with advancing age. In contrast, the adjusted risks of kidney transplantation were significantly lower for patients with COPD (RR = 0.47, 95% CI 0.41–0.54, for smokers and RR = 0.54, 95% CI 0.50–0.58, for non-smokers) than without COPD [RR = 0.72, 95% CI 0.70–0.75, for smokers and RR = 1.00 for non-smokers (referent category)]. Conclusions: Patients with COPD who begin dialysis therapy in the US experience higher mortality and lower rates of kidney transplantation, outcomes that are far worse among current smokers.