Asthma is a chronic disorder of the airways that is characterized by reversible airflow obstruction and airway inflammation, persistent airway hyperreactivity, and airway remodeling. The etiology of asthma is complex and multifactorial. Recent advances have demonstrated the importance of genetics in the development of asthma, particularly atopic asthma. Environmental stimuli, particularly early childhood infections, have also been associated with the development of asthma. Most current data seem to suggest that these factors drive the development of a Th-2 lymphocyte-predominant immune response, which has been associated with atopy and IgE-mediated inflammation. The concept of reversible airflow obstruction has also recently been challenged. It is now clear that chronic airway changes occur, which may contribute to progressive airflow obstruction. We discuss the important influence of genetic and environmental factors on the emergence of the asthmatic phenotype. The significance of Th-1 and Th-2 lymphocyte-mediated immunity are discussed, and the inflammatory processes leading to chronic airway inflammation are detailed.