The association of lung cancer incidence with bidi smoking was examined using a cohort study data in Karunagappally, Kerala, India. We sought interview of all the residents in Karunagappally with the population of 385,103 in 1991 census, and established a cohort of 359,619 (93% of the population in 1991) in the 1990s. There were 65,829 men aged 30–84 at interview after excluding those diagnosed as cancer or died of any cause before 1997. Among them, 212 newly diagnosed lung cancer cases were ascertained during the 8‐year period between 1997 and 2004 through Karunagappally Cancer Registry. The relative risk (RR) of lung cancer was obtained from Poisson regression analysis of grouped data. Lung cancer incidence was relatively high among Moslem people and those with lower educational history. When taking into account attained age, religion and education, the RR between current bidi smokers and those who had never smoked bidis was 3.9 (95%CI = 2.6–6.0, p < 0.001). The lung cancer risk did not return to the level of non‐smokers within 10 years after cessation. In further analyses using only those never smoked cigarettes to examine the effect of bidi smoking alone on lung cancer risk, current smokers of bidis had the RR of 4.6 (95%CI = 2.5–8.5, p < 0.001). Lung cancer incidence increased with larger amounts of bidi smoked a day (p < 0.001), with longer durations of smoking bidis (p < 0.001), and with younger ages starting smoking bidis (p < 0.001). Immediate measures should be taken to stop bidi smoking, which is common in south Asia. © 2008 Wiley‐Liss, Inc.