We compared the effect of an inhaled corticosteroid, budesonide, and an inhaled beta 2-agonist, terbutaline, on clinical symptoms, lung function, and airway inflammation in 14 adult patients with newly diagnosed asthma. The study was conducted as a randomized, double-blind, parallel-group trial. Seven patients inhaled 600 micrograms, twice daily, of budesonide, the other seven patients inhaled 375 micrograms, twice daily, of terbutaline via identical metered-dose inhalers with a spacer. Bronchial biopsy specimens, obtained before randomization and after 3 months of treatment, were analyzed by electron microscopy. Both groups improved clinically budesonide was more effective than terbutaline in improving morning and evening peak expiratory flow rates, as well as bronchial responsiveness to inhaled histamine. Treatment with budesonide was accompanied by increased numbers of ciliated airway cells and intraepithelial nerves and fewer inflammatory cells, including eosinophils, especially in the epithelium, these changes were not observed in specimens from terbutaline-treated patients. We conclude that, in contrast to inhaled terbutaline, inhaled budesonide improved lung function and bronchial hyperreactivity in adult subjects with asthma treated for 3 months and that this corticosteroid was more effective in ameliorating abnormalities of the bronchial epithelium and decreasing inflammation in the airways.