RATIONALE Airway inflammation in asthma is heterogeneous with different phenotypes. The inflammatory cell phenotype is modified by corticosteroids and smoking. Steroid therapy is beneficial in eosinophilic asthma (EA), but evidence is conflicting regarding non-eosinophilic asthma (NEA). OBJECTIVES To assess the inflammatory cell phenotypes in asthma after eliminating potentially confounding effects; to compare steroid response in EA versus NEA; and to investigate changes in sputum cells with inhaled corticosteroid (ICS). METHODS Subjects undertook ICS withdrawal until loss of control or 28 days. Those with airway hyper-responsiveness (AHR) took inhaled fluticasone 1000 microg daily for 28+ days. Cut-off points were > or = or <2% for sputum eosinophils and > or = or <61% for neutrophils. RESULTS After steroid withdrawal (n=94), 67% of subjects were eosinophilic, 31% paucigranulocytic and 2% mixed; there were no neutrophilic subjects. With ICS (n=88), 39% were eosinophilic, 46% paucigranulocytic, 3% mixed and 5% neutrophilic. Sputum neutrophils increased from 19.3% to 27.7% (p=0.024). The treatment response was greater in EA for symptoms (p<0.001), quality of life (p=0.012), AHR (p=0.036) and exhaled nitric oxide (p=0.007). Lesser but significant changes occurred in NEA (ie, paucigranulocytic asthma). Exhaled nitric oxide was the best predictor of steroid response in NEA for AHR (area under the curve 0.810), with an optimum cut-off point of 33 ppb. CONCLUSIONS After eliminating the effects of ICS and smoking, a neutrophilic phenotype could be identified in patients with moderate stable asthma. ICS use led to phenotype misclassification. Steroid responsiveness was greater in EA, but the absence of eosinophilia did not indicate the absence of a steroid response. In NEA this was best predicted by baseline exhaled nitric oxide.