BACKGROUND—The prevalence of asthma in children has increased in many countries over recent years. To plan effective interventions to reverse this trend we need a better understanding of the risk factors for asthma in early life. This study was undertaken to measure the prevalence of, and risk factors for, asthma in preschool children. METHODS—Parents of children aged 3-5 years living in two cities (Lismore, n=383; Wagga Wagga, n=591) in New South Wales, Australia were surveyed by questionnaire to ascertain the presence of asthma and various proposed risk factors for asthma in their children. Recent asthma was defined as ever having been diagnosed with asthma and having cough or wheeze in the last 12 months and having used an asthma medication in the last 12 months. Atopy was measured by skin prick tests to six common allergens. RESULTS—The prevalence of recent asthma was 22% in Lismore and 18% in Wagga Wagga. Factors which increased the risk of recent asthma were: atopy (odds ratio (OR) 2.35, 95% CI 1.49 to 3.72), having a parent with a history of asthma (OR 2.05, 95% CI 1.34 to 3.16), having had a serious respiratory infection in the first 2 years of life (OR 1.93, 95% CI 1.25 to 2.99), and a high dietary intake of polyunsaturated fats (OR 2.03, 95% CI 1.15 to 3.60). Breast feeding (OR 0.41, 95% CI 0.22 to 0.74) and having three or more older siblings (OR 0.16, 95% CI 0.04 to 0.71) decreased the risk of recent asthma. CONCLUSIONS—Of the factors tested, those that have the greatest potential to be modified to reduce the risk of asthma are breast feeding and consumption of polyunsaturated fats.