This study is an extended follow-up for 24 months of a 12-week trial to study the long-term clinical efficacy of low-dose inhaled budesonide (BUD) once or twice daily in children with mild asthma. A total of 122 children (mean age 9.7 years, girls/boys; 42/80) with mild asthma (FEV1 103.7% of predicted, reversibility in FEV1 3.5%, and fall in FEV1 after exercise 12.2%), not previously treated with inhaled steroids, were included in a double-blind, randomized, parallel-group study. The children were treated with inhaled BUD 100 or 200 microg administered via Turbuhaler once daily in the morning, 100 microg twice daily, or placebo for 27 months. Exercise and methacholine challenges were performed at 3-month intervals the first year and at 6-month intervals the second year, in a total of seven visits. A significant dose-response effect favoring BUD 200 microg daily (vs 100 microg daily) was found when comparing changes in FEV1, FEF25%, and FEV50%; the fall in FEV1 after an exercise test; and the effect on blood eosinophils. Bronchial hyperreactivity to methacholine decreased significantly on three visits in patients treated with BUD 200 microg daily compared to placebo. Growth rate was not significantly affected except in children aged 7-11 years at baseline after 12 months of treatment. In conclusion, 100 or 200 microg daily of inhaled BUD for 27 months is safe and effective in protecting against exercise-induced asthma and achieving nearly normal lung function. Baseline lung function was not significantly affected in this group of children with mild asthma.