Background A recent study found lower self-reported prevalence of tobacco smoking in a peri-urban area of Lima, Peru than previously reported in urban samples. These regions encompass substantial proportions of Peru’s population – ones at greater risk of disease due to reduced healthcare access – but have been less often studied. We validate low smoking prevalence with urine cotinine and characterize chronic disease and lung function outcomes between non-, occasional, and daily smokers. Methods Data are from the CRONICAS Cohort Study, a population-based longitudinal study in four low-resource Peruvian settings, which began in 2010. Of a baseline cohort of 2978 adults, we prospectively followed 2583 (87%) to determine prevalence of chronic illness. Results In a baseline sub-sample of 382 participants, median adjusted cotinine was 0.0 mcg/mg (IQR 0–0) for both self-reported non-smokers and occasional smokers compared to 172.3 mcg/mg (IQR 0–709.2) for daily smokers. Creatinine-adjusted cotinine validated daily smoking prevalence of 4.7% at a cutoff of 100 mcg/mg. Kappa statistic for daily smoking and creatinine- adjusted cotinine ≥100 mcg/mg was 0.65 (95% CI 0.47, 0.83), indicating substantial agreement. At baseline, we found 3.3% daily and 8.9% occasional smoking by self-report for the full cohort. Follow-up indicated little difference in chronic disease prevalence between groups. Daily smokers trended toward having a greater decline in FVC (−1%; 95% CI -2.9, 0.8) and FEV1 (−1.3%; 95% CI -3.2, 0.6) over 40 months when compared to non-smokers, whereas the decline in lung function for occasional smokers was similar compared to non-smokers (−0.2% FVC; 95% CI -1.5, 1.0) and (0% FEV1; 95% CI -1.3, 1.3). Conclusions Our data places Peru within a previously-described pattern of smoking found in much of Latin America, favoring occasional over daily smoking and low cigarette consumption. We determine that there are not significant differences between smoking groups concerning chronic disease outcomes. We favor distinguishing between daily and occasional smokers in order to accurately characterize these low-use populations. Electronic supplementary material The online version of this article (doi:10.1186/s12971-017-0137-8) contains supplementary material, which is available to authorized users.