Chronic obstructive pulmonary disease (COPD) is considered as the strongest independent risk factor for lung cancer (LC) development, suggesting an overlapping genetic background in both diseases. A common feature of both diseases is aberrant immunity in respiratory epithelia that is mainly regulated by Toll-like receptors (TLRs), key regulators of innate immunity. The function of the flagellin-sensing TLR5 in airway epithelia and pathophysiology of COPD and LC has remained elusive. We performed case–control genetic association and functional studies on the importance of TLR5 in COPD and LC development, comparing Caucasian COPD/LC patients (n = 974) and healthy donors (n = 1283). Association analysis of three single nucleotide polymorphisms (SNPs) (rs725084, rs2072493_N592S, and rs5744174_F616L) indicated the minor allele of rs2072493_N592S to be associated with increased risk for COPD (OR = 4.41, p < 0.0001) and NSCLC (OR = 5.17, p < 0.0001) development and non-small cell LC risk in the presence of COPD (OR = 1.75, p = 0.0031). The presence of minor alleles (rs5744174 and rs725084) in a co-dominant model was associated with overall survival in squamous cell LC patients. Functional analysis indicated that overexpression of the rs2072493_N592S allele affected the activation of NF-κB and AP-1, which could be attributed to impaired phosphorylation of p38 and ERK. Overexpression of TLR5N592S was associated with increased chemosensitivity in the H1299 cell line. Finally, genome-wide transcriptomic analysis on WI-38 and H1299 cells overexpressing TLR5WT or TLR5N592S, respectively, indicated the existence of different transcription profiles affecting several cellular pathways potentially associated with a dysregulated immune response. Our results suggest that TLR5 could be recognized as a potential biomarker for COPD and LC development with functional relevance.