Both inhaled and oral corticosteroids have proven benefit in the management of asthma, but their efficacy in nonasthmatic, smoking-related chronic obstructive pulmonary disease (COPD) remains controversial. Recent data suggest that responsiveness to beta 2-agonists predicts oral and inhaled steroid responsiveness in most patients with COPD, however, a poor bronchodilator response does not preclude a good response to steroids. COPD patients with histologic, cytologic, or biochemical indices of inflammation characteristic of asthma, such as sputum eosinophilia, are more likely to be steroid responsive than are COPD patients without these characteristics. Contrary to previous experience, steroid responsiveness does not appear to be an all-or-nothing phenomenon; rather there appears to be a continuous spectrum of steroid responses from none to marked. The effects of long-term inhaled steroid use on the natural progression of chronic airflow obstruction are currently under investigation.