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The condition characterized by a decreased Diffusion Capacity for Carbon Monoxide (DLCO) is pulmonary fibrosis. This condition involves the thickening and stiffening of lung tissue, which can significantly impair the gas exchange process. As the alveolar walls become fibrotic, the diffusion pathway for gases, including carbon monoxide, is reduced. The DLCO test measures how well oxygen and carbon monoxide can move from the lungs into the bloodstream, and a low DLCO indicates that the lungs are not functioning properly in this capacity.

In contrast, chronic bronchitis and emphysema, both types of chronic obstructive pulmonary disease (COPD), often show a preserved or mildly decreased DLCO early in their course. While asthma can lead to airway obstruction, it typically does not affect the DLCO significantly unless there is an element of airway remodeling or chronic inflammation leading to more severe lung damage over time. Therefore, pulmonary fibrosis is the most definitive condition associated with a decreased DLCO.