In a controlled prospective study we have measured growth and pulmonary function in children with asthma during long-term treatment with inhaled budesonide and compared these findings with those obtained from children not treated with corticosteroids. Two hundred and sixteen children were followed at 6 monthly intervals for 1-2 years without inhaled budesonide and then for 3-6 years on inhaled budesonide. Sixty-two children treated with theophylline, beta 2-agonists and sodium-cromoglycate but not with inhaled steroids were also followed for 3-7 years (controls). During the period of budesonide therapy the mean daily dose decreased from 710 to 430 micrograms (P < 0.01) and no signs of tachyphylaxis to the treatment were seen. Budesonide treatment was associated with a significant reduction in the number of annual hospital admissions due to acute severe asthma (from 0.03 to 0.004 per child, P < 0.001). In patients not treated with budesonide an annual decrease in % predicted FEV1 of 1-3% was seen. In contrast FEV1 improved significantly with time during budesonide treatment, both compared with the run-in period and with the control group (P < 0.01). Furthermore, there was a significant (P = 0.01) relationship between the duration of asthma at the start of budesonide and the annual increase in FEV1 during budesonide therapy. After 3 years of treatment with budesonide, children who started this therapy later than 5 years after the onset of asthma had significantly lower FEV1 (96%) than the children who received budesonide within the first 2 years after the onset of asthma (101%) (P < 0.05).(ABSTRACT TRUNCATED AT 250 WORDS)