Hospitalization rates for asthma in New York City are highest in poor urban neighborhoods, although the reasons for this are unknown. We performed a small area analysis of asthma hospitalization rates in Boston, to determine whether this pattern of asthma hospitalization also obtained in a medium-sized city and to identify characteristics of neighborhoods with high hospitalization rates, including the relative use of inhaled anti-inflammatory medication. Zip codes were used to define 22 small areas within Boston. The number of asthma hospitalizations for residents of each area in 1992 was obtained from the Codman Research Group. Population and demographic characteristics of each area were obtained from the 1990 US Census. Estimates of inhaled asthma medications (beta-agonists, steroids, and cromolyn) dispensed in each area in 1992 were obtained from IMS America. Asthma hospitalization rates for each of the six areas with the highest rates (5.3 to 9.8 per 1,000 persons) were significantly greater than the city-wide average of 4.2 hospitalizations per thousand persons (p < 0.001 for each comparison). Asthma hospitalization rate was positively correlated with poverty rate and with the proportion of nonwhite residents and inversely correlated with income and educational attainment. Asthma hospitalization rate was inversely correlated with the ratio of inhaled anti-inflammatory to beta-agonist medication use (r = -0.55, p = 0.008). We conclude that asthma hospitalization rates in Boston are highest in poor inner city neighborhoods, and that these high rates affect both genders and all age groups. Underuse of inhaled anti-inflammatory medication may be one of the many factors that contributes to this excess hospitalization.