Under-diagnosis of COPD is an important unmet medical need. We investigated the characteristics and prognosis of hospitalised patients with undiagnosed COPD. Methods: The PAC-COPD cohort included 342 COPD patients hospitalised for the first time for an exacerbation of COPD (2004-2006). Patients were extensively characterised using sociodemographic, clinical and functional variables, and the cohort was followed-up through 2008. We defined "undiagnosed COPD" by the absence of any self-reported respiratory disease and regular use of any pharmacological respiratory treatment. Results: Undiagnosed COPD was present in 34% of patients. They were younger (mean age 66 vs. 68 years, p = 0.03), reported fewer symptoms (mMRC dyspnoea score, 2.1 vs. 2.6, p < 0.01), and had a better health status (SGRQ total score, 29 vs. 40, p < 0.01), milder airflow limitation (FEV1% ref., 59% vs. 49%, p < 0.01), and fewer comorbidities (two or more, 40% vs. 56%, p < 0.01) when compared with patients with an established COPD diagnosis. Three months after hospital discharge, 16% of the undiagnosed COPD patients had stopped smoking (vs. 5%, p = 0.019). During follow-up, annual hospitalisation rates were lower in undiagnosed COPD patients (0.14 vs. 0.25, p < 0.01); however, this difference disappeared after adjustment for severity. Mortality was similar in both groups. Conclusions: Undiagnosed COPD patients have less severe disease and lower risk of re-hospitalisation when compared with hospitalised patients with known COPD.