Atopic dermatitis (AD) in young children is often followed by the development of asthma (atopic march). The role of environmental exposures is unclear in this high-risk population. We aimed to determine the predictive relationship between indoor allergen exposures, particularly pets, rodents, and cockroaches, to the development of asthma in a prospective pediatric cohort. Children with AD and a family history of allergy were followed prospectively with questionnaire ascertainment of environmental exposure to cats, dogs, cockroaches, rats, and mice. Asthma was diagnosed by study physicians based on caregiver reports of symptoms continually assessed over the course of the study period. Fifty-five of the 299 children developed asthma by the end of the study. Cat exposure had a strong and independent effect to reduce the risk of developing asthma across all analyses (odds ratio [OR], 0.16; 95% confidence interval [CI], 0.05-0.53). Dog, mouse, rat, and cockroach exposures did not significantly influence the development of asthma. Daycare exposure had the largest risk reduction for the development of asthma (OR, 0.08; 95% CI, 0.03-0.19). Maternal asthma (OR, 2.93; 95% CI, 1.29-6.67), baseline body mass index (OR, 1.23; 95% CI, 1.08-1.42), and specific immunoglobulin E to house-dust mix at 3 years were each independent risk factors for the development of asthma. In children with AD, cat and daycare exposure may reduce the risk of developing early childhood asthma.