The use of noninvasive methods of monitoring airway inflammation, such as exhaled nitric oxide (eNO) and induced sputum, has been shown to improve asthma monitoring and optimize treatment in adult patients with asthma. There is a lack of comparable data in children. Forty children with stable asthma eligible for inhaled steroid reduction were reviewed every 8 weeks, and their inhaled steroid dose halved if clinically indicated. eNO, sputum induction combined with bronchial hyperreactivity testing, and exhaled breath condensate collection were performed at each visit to predict success or failure of reduction of inhaled steroids. Thirty of 40 (75%) children tolerated at least one dose reduction, 12 of 40 (30%) were successfully weaned off, and in total, 15 of 40 (38%) children experienced loss of asthma control. Treatment reduction was successful in all children who had no eosinophils in induced sputum before the attempted reduction. Using multiple logistic regression, increased eNO (odds ratio, 6.3; confidence interval, 3.75-10.58) and percentage of sputum eosinophils (odds ratio, 1.38; confidence interval, 1.06-1.81) were significant predictors of failed reduction. These findings suggest that monitoring airway inflammation may be useful in optimizing treatment in children with asthma.