Most previous studies on the association between moisture damage and asthma have been cross-sectional and relied on self-reported exposure and health. The present authors studied the association by carrying out careful home inspections among new, clinically determined cases of asthma and controls. New cases of asthma aged 12-84 months (n = 121) were recruited prospectively and matched for year of birth, sex and living area with two randomly selected population controls (n = 241). Trained engineers visited all homes. Both cases and controls had lived >or=75% of their lifetime or the past 2 yrs in their current home. Risk of asthma increased with severity of moisture damage and presence of visible mould in the main living quarters but not in other areas of the house. Cases more often had damage in their bedroom. Associations were comparable for atopic and nonatopic asthma and for children aged >30 months or <or=30 months. The present results, using standardised assessment of exposure and asthma, suggest that moisture damage and mould growth in the main living quarters are associated with the development of asthma in early childhood.