The effects of treatment with budesonide (200 micrograms twice daily) and terbutaline (500 micrograms four times daily) has been compared with the effects of placebo and terbutaline in 27 children with mild asthma, aged 7-14 years, in a double blind, randomised placebo controlled study over eight weeks. Bronchial responsiveness (PC20 histamine), lung function, the amplitude of diurnal variation in peak expiratory flow (PEF), and symptom scores were measured. Baseline FEV1 was over 70% predicted and PC20 histamine less than 8 mg/ml. Twelve children were treated with budesonide and terbutaline and 15 with placebo and terbutaline. After four and eight weeks of treatment the change in PC20 was significantly greater after budesonide and terbutaline than after terbutaline alone by 2.1 (95% CI 0.5-3.8) and 1.3 (95% CI 0.1-2.5) doubling doses respectively. Mean FEV1 did not change in either group. The change in afternoon and nocturnal PEF was significantly greater after budesonide and terbutaline than after terbutaline alone. The amplitude of diurnal variation in PEF did not change significantly in either group. Peak flow reversibility decreased in the budesonide group. There were no differences between treatments for cough and dyspnoea, but wheeze improved in the budesonide group. The children with mild asthma treated with budesonide and terbutaline showed improvement in bronchial responsiveness, afternoon and nocturnal PEF, and symptoms of wheeze and a fall in peak flow reversibility by comparison with those who received terbutaline alone.