Reduced post-natal microbial stimulation resulting from improvements in public health measures, smaller family size, and through increased antibiotic use has been postulated to account for the increasing prevalence of atopic diseases seen predominantly in developed countries. To investigate use of antibiotics in the first year of life and subsequent development of atopic disease in early childhood. A prospective birth cohort of 198 children at high atopic risk was recruited prenatally and followed for 5 years. Illnesses and antibiotic use were ascertained through daily diaries, and diagnoses of asthma and hayfever were collected by questionnaire interviews. The children were examined regularly for eczema, and atopic status was defined by skin prick tests and serum total IgE. The effect of antibiotic use on subsequent atopic disease was examined using logistic regression with propensity score adjustment. 54.0% (107/198) of children received at least one course of antibiotics, mainly for acute respiratory illnesses (ARI). Thirty-three percent (329/984) of the ARI involved the lower respiratory tract (LRI). Twenty-three percent (222/984) of ARI were treated with antibiotics, with LRI significantly more likely to receive antibiotics. Antibiotic use was associated with asthma (unadjusted odds ratio 2.3; 95% confidence interval 1.2-4.5; P=0.01) but this association was reduced after propensity score adjustment. No associations were found between antibiotic use and eczema, current wheeze, current asthma, atopic asthma, allergic rhinoconjunctivitis or atopy. Although this was a small study, systematic and careful monitoring of ARI, antibiotic use, and asthma and atopic diseases did not indicate that receipt of antibiotics early in life led to subsequent asthma or atopy at 5 years.