COPD is characterized by abnormal repair in the lung resulting in airway obstruction associated with emphysema and peripheral airway fibrosis. As the presence and degree of airways disease and emphysema varies between COPD patients this may explain the heterogeneity in the response to treatment. It is currently unknown whether and to what extent inhaled steroids can affect the abnormal repair process in the airways and lung parenchyma in COPD. We investigated the effects of fluticasone on TGFβ-and cigarette smoke-induced changes in Smad signaling and extra cellular matrix (ECM) production in airway and parenchymal lung fibroblasts from patients with severe COPD. We showed that TGFβ-induced ECM production by pulmonary fibroblasts, but not activation of the Smad pathway, was sensitive to the effects of fluticasone. Fluticasone induced decorin production by airway fibroblasts, and partly reversed the negative effects of TGFβ treatment. Fluticasone inhibited biglycan production in both airway and parenchymal fibroblasts and procollagen 1 production only in parenchymal fibroblasts, thereby restoring the basal difference in procollagen 1 production between airway and parenchymal fibroblasts. Our findings suggest that the effects of steroids on the airway compartment may be beneficial for patients with severe COPD, i.e. restoration of decorin loss around the airways, while the effects of steroids on the parenchyma may be detrimental as the tissue repair response, i.e. biglycan and procollagen production is inhibited. More research is needed to further disentangle these differential effects of steroid treatment on the different lung compartments and its impact on tissue repair and remodeling in COPD.