OBJECTIVE--To investigate whether prevalence of asthma in children increased in 10 years. DESIGN--Serial cross sectional studies of two populations of children by means of standard protocol. SETTING--Two towns in New South Wales: Belmont (coastal and humid) and Wagga Wagga (inland and dry). SUBJECTS--Children aged 8-10 years: 718 in Belmont and 769 in Wagga Wagga in 1982; 873 in Belmont and 795 in Wagga Wagga in 1992. MAIN OUTCOME MEASURES--History of respiratory illness recorded by parents in self administered questionnaire; airway hyperresponsiveness by histamine inhalation test; atopy by skin prick tests; counts of house dust mites in domestic dust. RESULTS--Prevalence of wheeze in previous 12 months increased in Belmont, from 10.4% (75/718) in 1982 to 27.6% (240/873) in 1992 (P < 0.001), and in Wagga Wagga, from 15.5% (119/769) to 23.1% (183/795) (P < 0.001). The prevalence of airway hyperresponsiveness increased twofold in Belmont to 19.8% (173/873) (P < 0.001) and 1.4-fold in Wagga Wagga to 18.1% (P < 0.05). The prevalence of airway hyperresponsiveness increased mainly in atopic children only, but the prevalence of atopy was unchanged (about 28.5% in Belmont and about 32.5% in Wagga Wagga). Numbers of house dust mites increased 5.5-fold in Belmont and 4.5-fold in Wagga Wagga. CONCLUSIONS--We suggest that exposure to higher allergen levels has increased airway abnormalities in atopic children or that mechanisms that protected airways of earlier generations of children have been altered by new environmental factors.