The effect of genetic and environmental factors on the prevalence of allergic disorders in early childhood was determined in a prospective follow-up study. Information was available on 1174 children at the age of 2 years. Two-hundred and seventy-five were considered to have an allergic disorder. The prevalence varied from 3.2% for rhinitis to 10.9% for asthma. At 2 years 60 children reacted positively on skin-prick test (SPT). Multivariate logistic regression analysis was used to obtain adjusted odds ratios (95% confidence interval) for each factor. For asthma, positive family history, male sex, low birth-weight, maternal smoking and season of birth were significant risk factors. For eczema, positive family history was the only significant risk factor. For rhinitis, lower socio-economic group and autumn birth were significant. Male sex and low birth-weight were significant for skin test positivity. Positive family history and low birth-weight were significant risk factors for any allergy. Low birth-weight was also a significant risk for skin test reactivity to house dust mite. Genetic and environmental factors have a profound effect on the development of allergic disorders in the first two years of life.