In 1999 a comprehensive review was published in Thorax that evaluated the role of exposure to tobacco smoke products (TSPs) in respiratory disease. The present review addresses papers published within the past 12 months on the effects of TSPs on childhood asthma and atopic disease, along with a few reports on possible mechanisms by which TSPs exert their adverse effects. Most of the observational studies published during the past year support the conclusion that both in-utero and, to some degree, passive (environmental) tobacco smoke (ETS) exposure adversely affect pulmonary function, and predispose to asthma symptoms and possibly bronchial hyperresponsiveness in childhood, but play little or no role in atopy development. However, in TSP-induced pulmonary disease, a mechanism of upregulation of pulmonary neuroendocrine cells has been hypothesized. An interventional study clearly demonstrated a need for a total (instead of partial) ban on indoor smoking in the homes of children with asthma in order to achieve significant reductions in levels of urinary cotinine. Because there is a large body of evidence for adverse effects of in-utero TSP as well as ETS exposure on respiratory health in children, we are in dire need of studies to elucidate when TSP exposure causes most damage, the mechanisms that underlie this damage, and how we can prevent unnecessary harm to the respiratory system in the vulnerable child.