The study investigated the effect of the oral H1-blocker terfenadine on allergen challenge in subjects with nasal allergy in comparison with the topical steroid, budesonide. A randomized, placebo-controlled, double-blind, crossover study with 3 experimental days was performed outside the pollen season. Seventeen nonsmokers with hay fever (symptoms, positive skin prick test, and RAST against timothy) were treated for 14 days before each experimental day, where the response to nasal challenge with four different concentrations of timothy was measured every 15 min for 6 h. The nasal cavity dimensions were measured by acoustic rhinometry and the olfactory function as the threshold for the sense of smell of butanol. Nasal symptoms were determined by questionnaires. Both terfenadine and budesonide dry powder had an effect on the hay fever symptoms during nasal pollen challenge. Terfenadine was more efficient than budesonide against histamine-mediated symptoms such as sneezing and itching. Budesonide increased nasal airway dimensions better than terfenadine (P < 0.01). A marked effect of budesonide was seen 1-2 h after challenge, suggesting an effect on "early late phase" reaction in the nose. In 7/17 subjects, a significant (P < 0.05) improvement of olfactory function after budesonide treatment was seen. In conclusion, topical steroid (budesonide) is superior to antihistamine (terfenadine) in treatment of nasal congestion in hay fever, especially for the postchallenge reaction, and may, in some cases, relieve the decreased sense of smell during pollen challenge.