Perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) are increasingly recognized for their adverse impact on human health, particularly on lung function. However, current research results are inconsistent and molecular mechanisms remain unclear, with no studies combining epidemiological, in vivo and in vitro investigations. Our population-based study revealed that PFOS and PFOA exposure is negatively associated with lung function. In vitro, PFOS and PFOA exposure significantly downregulated SP-B mRNA and protein levels, and SP-B expression was restored by overexpression of HSD17B1. PFOS induced hypermethylation and downregulated expression of HSD17B1 in tandem with SP-B. Notably, expression of SP-B was restored after treatment with demethyltransferase inhibitor. In vivo studies corroborated these findings, where PFOS exposure resulted in impaired lung function, histopathological changes, and decreased expression of SP-B and HSD17B1 in lung tissues. Our research demonstrates that PFOS downregulates SP-B expression by inducing hypermethylation and downregulating expression of HSD17B1, leading to impaired lung function.