Measurement of fractional nitric oxide concentration in exhaled breath (FENO) is a simple, noninvasive method to evaluate eosinophilic airway inflammation. Nitric oxide (NO) arising from peripheral small airways/alveoli (alveolar NO concentration [CalvNO]) can be estimated using multiple flow rates and a two-compartment model of the airways and alveoli. Omalizumab, a monoclonal anti-IgE antibody, is approved for the treatment of allergic asthma and also has been shown to decrease FENO levels. This study investigates the effects of omalizumab, when added to an inhaled corticosteroid (ICS) ± long-acting beta-adrenergic agonist (LABA) treatment, on peripheral small airway/alveolar inflammation reflected by FENO measurements at higher flow rates. We hypothesized that compared with placebo, omalizumab would decrease CalvNO levels in asthmatic patients on ICS ± LABA. Forty-two patients with moderate-to-severe asthma were randomly assigned 2:1 to either omalizumab (n = 29) or placebo treatment (n = 13) for 16 weeks. Selection criteria included moderate-to-severe asthmatic patients on an ICS ± LABA, positive skin test to one or more perennial allergen, screening FENO of >13 ppb, and a baseline IgE of 30-700 IU/mL. FENO measured at multiple flow rates was used to calculate CalvNO over the course of 16 weeks. FENO levels decrease with increasing flow rates (p < 0.05 repeated measures ANOVA) but no differences between the placebo and treatment groups in overall CalvNO levels or in the changes of CalvNO with time were found. Omalizumab did not lower the CalvNO, which could have been caused by the initial low CalvNO in this asthmatic population. The model used may not be completely sufficient and/or sensitive enough to detect small changes in CalvNO.