Asthma is a respiratory syndrome that frequently is underdiagnosed, particularly in young children. This primarily results from the lack of clinically useful criteria for making the diagnosis in the absence of objective tests, which are problematic in young children. Because new information suggests that delayed diagnosis may lead to permanently decreased lung function that could be prevented by early treatment, it is important that an accurate diagnosis be made as early as possible. Although simple criteria exist for determining if a patient has asthma, there is a tendency to delay making the diagnosis for a variety of reasons, including the observation that many children who begin wheezing at an early age stop wheezing by the time they are 6 years of age, and concerns over adverse effects from falsely labeling a patient with a potentially stigmatizing condition. Young children who receive an incorrect diagnosis of asthma are at an increased risk of receiving unnecessary medications and may be denied life insurance, health insurance, and admission into the military later in life. On close examination, each of these concerns is unfounded. Early diagnosis of asthma has many potentially positive effects; the negative effects have generally been exaggerated and do not stand up to close scrutiny. Routine use of clinically useful criteria for making the diagnosis, as outlined in this review, may help to simplify the process of making an early diagnosis of asthma.