Abstract Background The effects of smoking reduction on the incidence of lung cancer in patients with chronic obstructive pulmonary disease (COPD) are not well known. This study aimed to investigate the effects of changes in smoking habits after COPD diagnosis on lung cancer development in patients who smoked less than 30 pack-years. Methods This nationwide retrospective cohort study included 16,832 patients with COPD who smoked less than 30 pack-years at the time of COPD diagnosis. Based on changes in smoking habits in the health screening examination data, smokers were categorized into three groups: quitters, reducers, and sustainers. The primary outcome was the risk of lung cancer development, which was estimated using the Cox proportional hazards model. We also modelled the amount of smoking reduction as a continuous variable. Results During a median follow-up of 4 years, the cumulative incidence of lung cancer was the highest among sustainers, followed by reducers and quitters. Compared with sustainers, reducers (adjusted HR 0.74, 95% CI:0.56–0.98) and quitters (adjusted HR 0.78, 95% CI:0.64–0.96) had a significantly lower risk of lung cancer. Incidence of lung cancer showed a decreasing trend with a decreasing amount of smoking (P for linearity < 0.01). Conclusions In patients with COPD who smoked less than 30 pack-years, smoking reduction and cessation lowered the risk of lung cancer.