Impaired lung function is an indicator of obstructive pulmonary disease and may be a consequence of cigarette smoking, making it challenging to disentangle its role in lung cancer etiology. We investigated the shared genetic basis of pulmonary dysfunction and lung cancer susceptibility using genome-wide data from the UK Biobank (>370,000 individuals) and the International Lung Cancer Consortium (29,266 cases, 56,450 controls). We observed strong genetic correlations between lung cancer and reduced forced expiratory volume in one second (FEV1: rg=0.098, p=2.3´10 -8 ) and the ratio of FEV1 to forced vital capacity (FEV1/FVC: rg=0.137, p=2.0´10 -12 ). In Mendelian randomization analyses reduced FEV1 was associated with risk of squamous cell carcinoma (odds ratio (OR)=1.51, 95% confidence intervals: 1.21-1.88), while reduced FEV1/FVC increased risk of adenocarcinoma (OR=1.17, 1.01-1.35) and lung cancer in never smokers (OR=1.56, 1.05-2.30). These results support a causal role of lung impairment in lung cancer etiology. Integrative analyses of pulmonary function instruments, including 73 newly discovered variants, revealed significant effects on lung tissue gene expression and implicated immune-related pathways in mediating the effects on lung cancer susceptibility.