Rationale: The small conducting airways are the major site of airflow obstruction in chronic obstructive pulmonary disease and may precede emphysema development. Objectives: We hypothesized a novel computed tomography (CT) biomarker of small airway disease predicts FEV1 decline. Methods: We analyzed 1,508 current and former smokers from COPDGene with linear regression to assess predictors of change in FEV1 (ml/yr) over 5 years. Separate models for subjects without and with airflow obstruction were generated using baseline clinical and physiologic predictors in addition to two novel CT metrics created by parametric response mapping (PRM), a technique pairing inspiratory and expiratory CT images to define emphysema (PRMemph) and functional small airways disease (PRMfSAD), a measure of nonemphysematous air trapping. Measurements and Main Results: Mean (SD) rate of FEV1 decline in ml/yr for GOLD (Global Initiative for Chronic Obstructive Lung Disease) 0-4 was as follows: 41.8 (47.7), 53.8 (57.1), 45.6 (61.1), 31.6 (43.6), and 5.1 (35.8), respectively (trend test for grades 1-4; P < 0.001). In multivariable linear regression, for participants without airflow obstruction, PRMfSAD but not PRMemph was associated with FEV1 decline (P < 0.001). In GOLD 1-4 participants, both PRMfSAD and PRMemph were associated with FEV1 decline (P < 0.001 and P = 0.001, respectively). Based on the model, the proportional contribution of the two CT metrics to FEV1 decline, relative to each other, was 87% versus 13% and 68% versus 32% for PRMfSAD and PRMemph in GOLD 1/2 and 3/4, respectively. Conclusions: CT-assessed functional small airway disease and emphysema are associated with FEV1 decline, but the association with functional small airway disease has greatest importance in mildto-moderate stage chronic obstructive pulmonary disease where the rate of FEV1 decline is the greatest. Clinical trial registered with www.clinicaltrials.gov (NCT 00608764).