Emerging evidence indicates that early life events can increase the risk for developing chronic obstructive pulmonary disease (COPD). Using an inducible transgenic mouse model for NF-κB activation in the airway epithelium, we found that a brief period of inflammation during the saccular stage (P3–P5) but not alveolar stage (P10–P12) of lung development disrupted elastic fiber assembly, resulting in permanent reduction in lung function and development of a COPD-like lung phenotype that progressed through 24 months of age. Neutrophil depletion prevented disruption of elastic fiber assembly and restored normal lung development. Mechanistic studies uncovered a role for neutrophil elastase (NE) in downregulating expression of critical elastic fiber assembly components, particularly fibulin-5 and elastin. Further, purified human NE and NE-containing exosomes from tracheal aspirates of premature infants with lung inflammation downregulated elastin and fibulin-5 expression by saccular-stage mouse lung fibroblasts. Together, our studies define a critical developmental window for assembling the elastin scaffold in the distal lung, which is required to support lung structure and function throughout the lifespan. Although neutrophils play a well-recognized role in COPD development in adults, neutrophilic inflammation may also contribute to early-life predisposition to COPD.