Peroxisome proliferator-activated receptor (PPAR)-γ is expressed in alveolar macrophages. The anti-inflammatory potential of the PPAR-γ ligands rosiglitazone and pioglitazone were investigated using in vitro alveolar macrophage models and in vivo animal models relevant to chronic obstructive pulmonary disease (COPD). PPAR-γ protein and gene expression in COPD alveolar macrophages was compared with control smokers and never-smokers. COPD macrophages were used to investigate the effects of PPAR-γ ligands and corticosteroids on lipopolysaccharide-induced cytokine production, alternative macrophage activation (M2) gene expression and efferocytosis. The effects of PPAR-γ ligands in a subchronic tobacco smoke model in mice were investigated. PPAR-γ protein expression was similar in COPD patients compared to controls, although increased gene expression levels were observed in COPD patients and control smokers compared to never-smokers. PPAR-γ ligands reduced tumour necrosis factor-α and CC chemokine ligand-5, but not CXC chemokine ligand-8, in COPD alveolar macrophages; these effects were generally less than those of the corticosteroid dexamethasone. Rosiglitazone increased M2 gene expression and enhanced efferocytosis of apoptotic neutrophils. Rosiglitazone and pioglitazone attenuated airway neutrophilia in a corticosteroid-resistant mouse model of pulmonary inflammation. We show biological actions of PPAR-γ agonists on corticosteroid-resistant disease, tobacco smoke-induced pulmonary inflammation, skewing of macrophage phenotype and clearance of apoptotic neutrophils.