Children are in contact with local environments, which may affect respiratory symptoms and allergic sensitization. We aimed to assess the effect of the environment and the walkability surrounding schools on lung function, airway inflammation and autonomic nervous system activity. Data on 701 children from 20 primary schools were analysed. Lung function, airway inflammation and pH from exhaled breath condensate were measured. Pupillometry was performed to evaluate autonomic activity. Land use composition and walkability index were quantified within a 500 m buffer zone around schools. The proportion of effects explained by the school environment was measured by mixed-effect models. We found that green school areas tended to be associated with higher lung volumes (FVC, FEV1 and FEF25-75%) compared with built areas. FVC was significantly lower in-built than in green areas. After adjustment, the school environment explained 23%, 34% and 99.9% of the school effect on FVC, FEV1, and FEF25-75%, respectively. The walkability of school neighbourhoods was negatively associated with both pupil constriction amplitude and redilatation time, explaining -16% to 18% of parasympathetic and 8% to 29% of sympathetic activity. Our findings suggest that the environment surrounding schools has an effect on the lung function of its students. This effect may be partially mediated by the autonomic nervous system.