A decreased Kco is associated with emphysema. We evaluated whether in heavy smokers, baseline Kco was associated with progression of CT-detected emphysema, and progression of airflow limitation. Heavy smokers, mean (SD) 41.3 (18.7) pack years, participating in a lung cancer screening trial underwent diffusion testing and CT-scanning of the lungs. CT-scanning was repeated after median (25(th)-75(th) percentile) 2.8 (2.7-3.0) years and emphysema was assessed by lung densitometry using the 15(th) percentile (Perc15). The association between Kco at baseline with progression of emphysema and lung function decline was assessed by multiple linear regression, correcting for baseline CT-quantified emphysema severity and FEV1/FVC, age, height, BMI, pack years and smoking status (current/former smoker). 522 participants were included with a mean (SD) age of 60.1 (5.4) years. Mean) Perc15 was -938 (19), absolute FEV1/FVC was 71.6\% (9) and Kco was 1.23 (0.25), which is 81.8\% (16.5) of predicted. By interpolation: a one standard deviation (0.25) lower Kco value at baseline, predicted a 1.6 HU lower Perc15 and a 0.78\% lower FEV1/FVC after follow-up (p<0.001). A lower baseline Kco value is independently associated with a more rapid progression of emphysema and airflow limitation in heavy smokers.