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Background: Chronic obstructive pulmonary disease (COPD) contributes to the incidence and prognosis of lung cancer. The presence of COPD significantly increases the risk of lung squamous cell carcinoma (LSCC). COPD may promote an immunosuppressive microenvironment in LSCC by regulating the expression of immune‐inhibitory factors in T cells, although the mechanisms remain unclear. In this study, we aimed to decipher the tumour microenvironment signature for LSCC with COPD at a single‐cell level. Methods: We performed single‐cell RNA sequencing on tumour tissues from LSCC with or without COPD, then investigated the features of the immune and tumour cells. We employed multiple techniques, including multispectral imaging, flow cytometry, tissue microarray analysis, survival analysis, co‐culture systems and in vitro and in vivo treatment experiments, to validate the findings obtained from single‐cell analyses. Results: LSCC with COPD showed increased proportions of tumour‐associated macrophages (TAMs) and higher levels of CD8+ T cell exhaustion molecules, which contributed to an immunosuppressive microenvironment. Further analysis revealed a critical cluster of CD74+ tumour cells that expressed both epithelial and immune cell signatures, exhibited a stronger capacity for tumorigenesis and predicted worse overall survival. Notably, migration inhibitory factor (MIF) secreted by TAMs from LSCC with COPD may promote the activation of CD74. MIF‐CD74 may interact with CD8+ T cells and impair their anti‐tumour activity by regulating the PI3K‐STAT3‐programmed cell death‐1 ligand 1 signalling pathway, facilitating tumour proliferation and immune evasion. Conclusions: Our comprehensive picture of the tumour ecosystem in LSCC with COPD provides deeper insights into relevant immune evasion mechanisms and potential targets for immunotherapy. Highlight: Our results demonstrated higher proportions of tumour‐associated macrophages (TAMs) and higher levels of exhaustion molecules in CD8+ T cells in the microenvironment of LSCC with COPD.CD74+tumour cells were associated with poor disease prognosis.Migration inhibitory factor (MIF)‐CD74 may interact with CD8+ T cells and impair their anti‐tumour activity by regulating the PI3K‐STAT3‐PD‐L1 signalling pathway, facilitating immune evasion. [ABSTRACT FROM AUTHOR]