Impaired pulmonary function is of prognostic importance in bronchiectasis. To assess the factors affecting pulmonary function in bronchiectasis, we studied the clinical features, atopic status, bronchial responsiveness, systemic inflammatory indices, and sputum characteristics including volume, purulence, leucocyte count, neutrophil chemotactic activity, elastolytic activity (EA) and bacteriology in 82 Chinese patients. The majority of patients had impaired spirometry with airflow obstruction but normal carbon monoxide diffusing capacity. Multivariate analysis showed that factors significantly associated with worse lung function were: bronchial hyperresponsiveness, concomitant asthma, higher serum globulin, higher peripheral leucocyte count, lower serum albumin, greater sputum volume, diffuse disease and older age. When subjects with clinical asthma were excluded, similar factors were identified, and in addition, longer duration of disease, presence of eosinophils in sputum and higher sputum EA were significantly related to worse spirometry. Most of the identified factors reflect a state of inflammation. Thus the findings suggest that persistent inflammation plays an important role in the deterioration of lung function in bronchiectasis.