To assess whether the use of larger than usual doses of inhaled steroid to treat severe asthma may adversely affect bone turnover and whether such an effect may be mitigated by altering the dose schedule, we investigated the effects of budesonide (BUD) on serum osteocalcin and the urinary output of hydroxyproline and calcium. Healthy adults were administered 1.2 or 2.4 mg of BUD per day (N = 40) or placebo (N = 8) in a crossover, double-blind comparison of morning versus diurnal dosing schedules for 1 month each. Both BUD doses reduced the 24-hour urinary free-cortisol output (p less than 0.001) and serum osteocalcin (p less than 0.001). The larger dose reduced the morning serum cortisol levels (p = 0.002). Neither dose increased the 8 AM urinary calcium or hydroxyproline output. Osteocalcin and plasma cortisol levels were higher on morning than on diurnal dosing (p = 0.01). The 24-hour urinary free-cortisol output was the same with either schedule (p = 0.96). Additional study is required to assess the clinical importance of the inhibitory effect of BUD on bone formation, as evidenced by the reduction in osteocalcin levels. Of concern is the possibility of serious bone complications resulting from the long-term use of inhaled steroid, particularly in growing children or patients in whom other risk factors for osteoporosis are present. The clinical advantage, if any, of morning dosing remains questionable.