Respiratory symptoms and pulmonary function have been evaluated in construction workers exposed to asbestos and in control subjects. Group I displayed pleural plaques but not lung tissue involvement on X-ray, group II had the same history of asbestos exposure as the previous group but had no pleural plaques, nor any lung tissue involvement, and group III constituted non-exposed control subjects. Chronic bronchitis and productive cough were 4-5 times more frequent in group I compared to group III, while non-productive cough was rare. Conventional spirometry gave no significant differences between exposed and non-exposed subjects, while expiratory flow rates during the latter half of the expiration (MEF50, MEF25) were reduced in group I. Closing volume (CV) was markedly increased in group I and the transfer factor of the lung for CO was slightly reduced. The static transpulmonary pressure - lung volume curve was much the same for all three groups. The difference in CV, MEF50, and MEF25 was greater between exposed and non-exposed non-smokers than between exposed and non-exposed smokers. No significant differences were noticed between those in group II and the control group III. The findings indicate that asbestos exposure whcih elicits pleural plaques, may cause pulmonary dysfunction, representing a disease of the small airways.