The respiratory function and immunological status of workers employed in the paper recycling industry were studied. The mean age of the 101 studied workers was 41 years, and the mean duration of their exposure was 17 years. A group of 87 unexposed workers of similar age, duration of employment, and smoking history was studied for the prevalence of chronic respiratory symptoms. Lung function in the paper workers was measured by recording maximum expiratory flow volume (MEFV) curves and recording forced vital capacity (FVC), 1-second forced expiratory volume (FEV1), and maximum expiratory flow rates at 50% and the last 25% of the FVC (FEF50, FEF25). Immunological studies were performed in all 101 paper workers and in 37 control workers (volunteers). These included skin-prick tests with paper-dust extracts and other nonoccupational allergens, as well as the measurement of total serum immunoglobulin E. Significantly higher prevalences of all chronic respiratory symptoms were found in paper compared with control workers (P < 0.01). The highest prevalences were found for chronic cough (36.6%), chronic phlegm (34.7%), chronic bronchitis (33.7%), sinusitis (31.7%), and dyspnea (18.8%). Occupational asthma was diagnosed in four (4.0%) of the paper workers. A logistic regression analysis performed on chronic respiratory symptoms of paper workers indicated significant effects of smoking and exposure, with the smoking effect being the most important. Multivariate analysis of lung-function parameters indicate significant effects of exposure. For paper workers, the measured FEF50 and FEF25 were significantly decreased, compared with predicted values, suggesting obstructive changes located primarily in smaller airways. Among 101 tested paper workers, 16 (15.8%) had positive skin-prick tests to at least one of the paper extracts; none of the control workers reacted to these extracts. Increased serum IgE levels were found in 21% of the paper workers and in 5% of control workers (P < 0.05). Paper workers with positive skin-prick tests to any of the paper and/or other tested extracts had higher prevalences of chronic respiratory symptoms and lower measured lung-function tests compared with predicted than did those with negative skin-prick tests, but the differences were not statistically significant. The measured concentrations of total and respirable dust in this industry were higher than those recommended by Croatian standards. Our study suggests that work in the paper-recycling industry is associated with respiratory impairment and that sensitive workers employed in this industry may be at particular risk of developing chronic respiratory abnormalities.