A sample of 310 low income urban children with asthma from 290 families was randomized into a control group and an experimental group that received health education to improve asthma management at home. No significant decreases in subsequent health care use were observed when the experimental group was compared to the control group without regard to previous hospitalization. When the comparison was restricted to children who had been hospitalized during the preceding year, however, the experimental group was found to have decreased its use of the emergency room significantly more than the control group (p less than 0.05) and to have experienced a significantly greater reduction in the mean number of hospitalizations (p less than 0.05) during the year of follow-up. The program reduced health care costs for children with one or more hospitalizations, saving $11.22 for every $1.00 spent to deliver health education.