Functional residual capacity (FRC) was measured at 6-monthly intervals for at least 2 years in 42 young asthmatic children. Over the 2-year period FRC decreased in the 42 children from a median of 136% to 117% of that predicted for height (P<0·05). These changes in FRC were associated with a reduction in the number of children receiving no regular treatment (ten at recruitment, 0 at 2 years), P<0·05, and an increase in the number of children receiving inhaled steroids (ten at recruitment and 29 at 2 years), P<0·01. Twenty-five children were hyperinflated at recruitment (FRC > 120% of that predicted for height) with median FRC 152% compared to only 16 children at 2 years median FRC 117%, P<0·01. We conclude that FRC decreases as asthmatic children get older but some children, worryingly and despite increased use of prophylactic therapy, remain chronically overdistended which may put them at serious risk of chronic obstructive airways disease in later life. © 1991, Baillière Tindall All rights reserved. All rights reserved.