A placebo-controlled, double blind, cross-over study of inhaled budesonide was carried out to examine its effectiveness in the treatment of chronic airflow limitation (CAL). Fourteen patients (11 males, mean age 66 years) with stable CAL received placebo treatment for four weeks followed by inhaled budesonide 400 micrograms BD for eight weeks. Response was assessed by measuring forced expiratory volume in one second (FEV1). There was no significant improvement in the overall spirometric measurements and symptom scores except a reduction in daily peak expiratory flow rate fluctuation (p < 0.05). However, individual patients showed significant increase in FEV1. Two patients (14%) had greater than 30% increase in FEV1 in response to inhaled corticosteroids. This response could not be predicted from history of allergy, skin test, bronchial challenge test, peripheral blood or sputum eosinophilia. We conclude that only a minority of patients with stable CAL may respond to inhaled budesonide. Nonetheless, patients who are symptomatic despite treatment with maximum doses of bronchodilators may have a trial of inhaled corticosteroids in order to demonstrate any additional benefit.