Homes contain low but measurable concentrations of endotoxin that have been linked to household conditions such as the presence of animals, smoking, crowding, and farm living. While endotoxin exposure in early life appears to have a protective effect for childhood asthma; the evidence from prospective cohort studies of young children suggests that endotoxin exposure contributes to early development of wheeze. Higher domestic endotoxin levels are linked to greater asthma severity in school age children unless children are farm residents where, higher doses of farm-related endotoxin seem to offer some protection against asthma. Currently there are inconsistencies between epidemiological studies examining the role of endotoxin and children's respiratory health that may be due, in part, to selection bias of study populations, timing between measurement of endotoxin levels and the assessment of asthma symptoms. Although there is good evidence to demonstrate that endotoxin exposure in homes is associated with wheeze in children, and less likely to be associated with asthma, understanding the mediating roles of atopy, genetic and other environmental factors requires further and extensive exploration.