A substantial body of evidence suggests an aetiological role of inflammation, and oxidative and nitrosative stress in asthma pathogenesis. Exhaled nitric oxide fraction (F(eNO)) may provide a noninvasive marker of oxidative and nitrosative stress, and aspects of airway inflammation. We examined whether children with elevated F(eNO) are at increased risk for new-onset asthma. We prospectively followed 2,206 asthma-free children (age 7-10 yrs) who participated in the Children's Health Study. We measured F(eNO) and followed these children for 3 yrs to ascertain incident asthma cases. Cox proportional hazard models were fitted to examine the association between F(eNO) and new-onset asthma. We found that F(eNO) was associated with increased risk of new-onset asthma. Children in the highest F(eNO) quartile had more than a two-fold increased risk of new-onset asthma compared to those with the lowest quartile (hazard ratio 2.1, 95% CI 1.3-3.5). This effect did not vary with the child's history of respiratory allergic symptoms. However, the effect of elevated F(eNO) on new-onset asthma was most apparent among those without a parental history of asthma. Our results indicate that children with elevated F(eNO) are at increased risk for new-onset asthma, especially if they have no parental history of asthma.