The use of electronic cigarettes (E‐cigs) is rapidly increasing. The latest generation of E‐cigs is highly customizable, allowing for high heating coil temperatures. The aim of this study was to assess the toxic potential of a fourth‐generation E‐cig. Aerosols generated from E‐liquid with (24 mg/mL) and without nicotine, using a fourth‐generation E‐cig, were chemically analysed and compared with cigarette smoke (K3R4F). Human lung epithelial cell lines and distal lung tissue explants were exposed to E‐cig vapour extract (EVE) and cigarette smoke extract for 24 hours and assessed for viability, inflammation, oxidative stress and genotoxicity. E‐cig aerosols contained measurable levels of volatile organic compounds, aldehydes and polycyclic aromatic hydrocarbons, in general, to a much lesser extent than cigarette smoke. Higher levels of certain carbonyls, e.g. formaldehyde, were detected in the E‐cig aerosols. EVEs decreased cell viability of BEAS‐2B cells, whereas little effect was seen in A549 cells and distal lung tissue. The nicotine‐containing EVE caused a greater decrease in cell viability and significant increase in DNA damage than the nicotine‐free EVE. Increased cytotoxicity, reactive oxygen species production and genotoxicity were seen with cells and tissue exposed to cigarette smoke extract compared with EVEs. Although E‐cig aerosols were less toxic than cigarette smoke, it was not benign. Moreover, the EVE containing nicotine was more toxic than the nicotine‐free EVE. More research is needed on the short‐ and long‐term health effects of vaping and the usage of newly emerging E‐cig devices to evaluate better the potential negative effects of E‐cigs on human health. There are few data on the toxic potential of new‐generation electronic cigarette (E‐cig) models. Aerosols generated from a fourth‐generation E‐cig contained volatile organic compounds, aldehydes and polycyclic aromatic hydrocarbons but to a lesser extent than cigarette smoke. E‐cig aerosol extracts were cytotoxic to BEAS‐2B cells, and caused increased cell death and DNA strand breaks when containing nicotine. More research is needed on the short‐ and long‐term health effects of vaping.