OBJECTIVE--To determine whether locally developed guidelines on asthma and diabetes disseminated through practice based education improve quality of care in non-training, inner city general practices. DESIGN--Randomised controlled trial with each practice receiving one set of guidelines but providing data on the management of both conditions. SUBJECTS--24 inner city, non-training general practices. SETTING--East London. MAIN OUTCOME MEASURES--Recording of key variables in patient records (asthma: peak flow rate, review of inhaler technique, review of asthma symptoms, prophylaxis, occupation, and smoking habit; diabetes: blood glucose concentration, glycaemic control, funduscopy, feet examination, weight, and smoking habit); size of practice disease registers; prescribing in asthma; and use of structured consultation "prompts." RESULTS--In practices receiving diabetes guidelines, significant improvements in recording were seen for all seven diabetes variables. Both groups of practices showed improved recording of review of inhaler technique, smoking habit, and review of asthma symptoms. In practices receiving asthma guidelines, further improvement was seen only in recording of review of inhaler technique and quality of prescribing in asthma. Sizes of disease registers were unchanged. The use of structured prompts was associated with improved recording of four of seven variables on diabetes and all six variables on asthma. CONCLUSIONS--Local guidelines disseminated via practice based education improve the management of diabetes and possibly of asthma in inner city, non-training practices. The use of simple prompts may enhance this improvement.