Previous studies have shown that the regular administration of short acting beta-agonists can be associated with adverse effects on airway caliber and bronchial hyperresponsiveness (BHR) and that this may occur through a proinflammatory mechanism. The aim was to explore possible adverse effects of high-dose beta-agonist therapy and to assess any adverse interaction with corticosteroids. We undertook a randomized, crossover study to investigate the effects of 6 wk of treatment with regular terbutaline (1 mg four times a day), regular budesonide (400 microg twice a day), combined treatment, and placebo in subjects with mild to moderate asthma. Major endpoints were PD(15) saline, PD(20) methacholine, and induced sputum differential cell counts. Thirty-four subjects were randomized and 28 completed the study. PD(15) saline decreased on terbutaline alone compared with placebo treatment and on combined treatment compared with budesonide alone (mean fold decrease of 0.57 [95% CI = 0.36, 0.90] and 0.65 [95% CI = 0.43, 0.97], respectively). PD(20) methacholine was not affected by the use of terbutaline either alone or in combination with budesonide. The percentage of eosinophils in induced sputum increased during terbutaline treatment alone compared with placebo (median 8.3% versus 4.4%, p = 0.049). The addition of terbutaline to budesonide did not affect the percentage of eosinophils compared with budesonide treatment alone. These findings support the hypothesis that short-acting beta-agonists have a permissive effect on airway inflammation and that when used in high dose there may be an unfavorable interaction with inhaled corticosteroids.