Background: Cigarette smoking induces inflammatory responses in all smokers and is the major risk factor for lung disease such as chronic obstructive pulmonary disease (COPD). In this progressive disease, chronic inflammation in the lung contributes to lung tissue destruction leading to the formation of chemotactic collagen fragments such as N-acetylated Proline-Glycine-Proline (N-ac-PGP). The generation of this tripeptide is mediated by a multistep pathway involving matrix metalloproteases (MMPs) 8 and 9 and prolyl endopeptidase (PE). Here we investigated whether cigarette smoke extract (CSE) stimulates human PMNs to breakdown whole matrix collagen leading to the generation of the chemotactic collagen fragment N-ac-PGP. Methodology/Principal Findings: Incubating PMNs with CSE led to the release of chemo-attractant CXCL8 and proteases MMP8 and MMP9. PMNs constitutively expressed PE activity as well as PE protein. Incubating CSE-primed PMNs with collagen resulted in collagen breakdown and in N-ac-PGP generation. Incubation of PMNs with the tripeptide N-ac-PGP resulted in the release of CXCL8, MMP8 and MMP9. Moreover, we tested whether PMNs from COPD patients are different from PMNs from healthy donors. Here we show that the intracellular basal PE activity of PMNs from COPD patients increased 25-fold compared to PMNs from healthy donors. Immunohistological staining of human lung tissue for PE showed that besides neutrophils, macrophages and epithelial cells express PE. Conclusions: This study indicates that neutrophils activated by cigarette smoke extract can breakdown collagen into N-ac-PGP and that this collagen fragment itself can activate neutrophils, which may lead in vivo to a self-propagating cycle of neutrophil infiltration, chronic inflammation and lung emphysema. MMP-, PE- or PGP-inhibitors can serve as an attractive therapeutic target and may open new avenues towards effective treatment of COPD. © 2013 Overbeek et al.