We evaluated the association of chronic obstructive pulmonary disease (COPD) and congestive heart failure (CHF) with outcomes in a 5% Medicare sample of 4447 elderly beneficiaries with lung cancer. Twenty-nine percent of patients had COPD and 13% had CHF. Patients with COPD or CHF had significantly decreased survival (hazard ratios 1.14 (1.05-1.25) and 1.38 (1.18-1.62), respectively); most of this differential was within 2 months after diagnosis. Patients with COPD or CHF were significantly less likely to receive surgery or chemotherapy than patients with neither COPD nor CHF. The association with less chemotherapy was similar in patients with the highest probability of surviving more than 2 months after the cancer diagnosis. In Medicare beneficiaries with lung cancer, COPD and CHF were common and were associated with both short-term mortality and decreased use of cancer treatments. Accounting for these two comorbid illnesses is important in evaluating health care utilization in this population.