The N‐nitroso‐trischloroethylurea (NTCU)‐induced mouse model of squamous lung carcinoma recapitulates human disease from premalignant dysplasia through invasive tumors, making it suitable for preclinical chemoprevention drug testing. Pioglitazone is a peroxisome proliferator‐activated receptor γ (PPARγ) agonist shown to prevent lung tumors in preclinical models. We investigated pioglitazone's effect on lesion development and markers of potential preventive mechanisms in the NTCU model. Female FVB/N mice were exposed to vehicle, NTCU or NTCU + oral pioglitazone for 32 weeks. NTCU induces the appearance of basal cells in murine airways while decreasing/changing their epithelial cell makeup, resulting in development of bronchial dysplasia. H&E and keratin 5 (KRT5) staining were used to detect and grade squamous lesions in formalin fixed lungs. mRNA expression of epithelial to mesenchymal transition (EMT) markers and basal cell markers were measured by qPCR. Dysplasia persistence markers desmoglein 3 and polo like kinase 1 were measured by immunohistochemistry. Basal cell markers KRT14 and p63, club cell specific protein and ciliated cell marker acetylated tubulin were measured by immunofluorescence. Pioglitazone treatment significantly reduced squamous lesions and the presence of airway basal cells, along with increasing normal epithelial cells in the airways of NTCU‐exposed mice. Pioglitazone also significantly influenced EMT gene expression to promote a more epithelial, and less mesenchymal, phenotype. Pioglitazone reduced the presence of squamous dysplasia and maintained normal airway cell composition. This work increases the knowledge of mechanistic pathways in PPARγ agonism for lung cancer interception and provides a basis for further investigation to advance this chemoprevention strategy.