The impact of inner city air pollution on the development of respiratory and atopic diseases in childhood is still unclear. In a cross sectional study in Dresden, Germany, 5,421 children in two age groups (5-7 yrs and 9-11 yrs) were studied according to the International Study of Asthma and Allergies in Childhood (ISAAC) phase II protocol. The prevalences of wheezing and cough as well as doctor diagnosed asthma and bronchitis were assessed by parental questionnaires. Children also underwent skin-prick testing, venipuncture for the measurement of serum immunoglobulin (Ig)E, lung function testing and a bronchial challenge test (4.5% saline) to assess airway hyperresponsiveness. Exposure was assessed on an individual basis by relating mean annual air pollution levels (SO2, NO2, CO, benzene, and O3) which had been measured on a 1 km2 grid, to the home and school address of each study subject. After adjusting for potential confounding factors an increase in the exposure to benzene of 1 microg x m3 air was associated with an increased prevalence of morning cough (adjusted odds ratio (aOR)): 1.15; 1.04-1.27) and bronchitis (aOR: 1.11; 1.03-1.19). Similar associations were observed for NO2 and CO. In turn, the prevalences of atopic sensitization, symptoms of atopic diseases and bronchial hyperresponsiveness were not positively associated with exposure to any of these pollutants. It is concluded that in this study a moderate increase in exposure to traffic-related air pollution was associated with an increased prevalence of cough and bronchitis, but not with atopic conditions in children.