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Chronic obstructive pulmonary disease (COPD) is regarded as one of the leading causes of morbidity and mortality across the world, yet its proper diagnosis remains a challenge. Community-based population studies conducted in North and South America, Europe, Australia, and Asia have revealed that 10% to 12% of adults aged 40 years or older have evidence of persistent airflow limitation on spirometry, but only 20% to 30% of these subjects have been diagnosed with COPD. These studies collectively suggest that approximately 70% of COPD worldwide may be underdiagnosed. Conversely, other studies have shown that between 30% and 60% of patients with a previous physician diagnosis of COPD do not actually have the disease, and hence they have been overdiagnosed. In this review, we define under- and overdiagnosis and explore the prevalence and the burden of under- and overdiagnosis of COPD on both patients and healthcare systems. We further describe potential solutions to reduce the incidence of under- and overdiagnosis of COPD.