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Lung squamous cell carcinoma (SCC) is thought to arise from premalignant lesions in the airway epithelium; therefore, studying these lesions is critical for understanding lung carcinogenesis. Previous microarray and sequencing studies designed to discover early biomarkers and therapeutic targets for lung SCC had limited success identifying key driver events in lung carcinogenesis, mostly due to the cellular heterogeneity of patient samples examined and the interindividual variability associated with difficult to obtain airway premalignant lesions and appropriate normal control samples within the same patient. We performed RNA sequencing on laser-microdissected representative cell populations along the SCC pathologic continuum of patient-matched normal basal cells, premalignant lesions, and tumor cells. We discovered transcriptomic changes and identified genomic pathways altered with initiation and progression of SCC within individual patients. We used immunofluorescent staining to confirm gene expression changes in premalignant lesions and tumor cells, including increased expression of SLC2A1, CEACAM5, and PTBP3 at the protein level and increased activation of MYC via nuclear translocation. Cytoband enrichment analysis revealed coordinated loss and gain of expression in chromosome 3p and 3q regions, respectively, during carcinogenesis. This is the first gene expression profiling study of airway premalignant lesions with patient-matched SCC tumor samples. Our results provide much needed information about the biology of premalignant lesions and the molecular changes that occur during stepwise carcinogenesis of SCC, and it highlights a novel approach for identifying some of the earliest molecular changes associated with initiation and progression of lung carcinogenesis within individual patients. Cancer Prev Res; 7(5); 487–95. ©2014 AACR.