Dimethylformamide (DMF) is a volatile organic compound listed as one of the four toxicants with the highest priority for human field study. However, the effect of DMF exposure on lung function and the underlying mechanisms remain unknown. We aimed to investigate the exposure-response relationship and possible mechanism between internal DMF exposure and lung function alteration. We studied 3701 Chinese adults from the Wuhan-Zhuhai cohort with a 3-year follow-up. The cross-sectional relationship between urinary biomarker of DMF exposure (N-Acetyl-S-(N-methylcarbamoyl)-L-cysteine, AMCC) and lung function, and the mediating role of plasma C-reactive protein (CRP) were assessed. We also convened a sub-cohort (N = 138) to assess the stability of AMCC in repeated urine samples collected for continuous 3 days and intervals of 1, 2 and 3 years. The longitudinal association between AMCC and lung function change in 3 years was further assessed. We found a dose-response relationship between AMCC and lung function reduction. Each 2-fold increase in AMCC was cross-sectionally associated with a 23.12-mL (95% CI: −36.68, −9.55) decrease in FVC and a 19.01-mL (95% CI: −31.08, −6.93) decrease in FEV1. Increased CRP significantly mediated 5.39% and 5.87% of the AMCC-associated FVC and FEV1 reductions, respectively. With 3-year follow-up, AMCC showed a fair to excellent stability (intra-class correlation coefficients were 0.88, 0.55, 0.60 and 0.50 for continuous 3 days, intervals of 1, 2 and 3 years, respectively) and was dose-dependently associated with longitudinal lung function decline. Compared with those with persistent low AMCC levels, participants with persistent high AMCC levels had a 101.09-mL/year (95% CI: −167.40, −34.77) decline in FVC and a 66.27-mL/year (95% CI: −114.14, −18.41) decline in FEV1 in the sub-cohort. Similar results were found in the full-cohort. Our findings suggest that exposure of general population to environmental DMF may impair lung function, and systematic inflammation may be an underlying mechanism. Display omitted •Urinary biomarker of DMF exposure (AMCC) was negatively associated with lung function.•Urinary AMCC was positively associated with plasma C-reactive protein (CRP).•Plasma CRP mediated urinary AMCC-associated lung function reduction.•Urinary AMCC showed a fair to excellent reproducibility during a 3-year period.•Higher urinary AMCC level was associated with lung function decline in 3 years.