Induced sputum examination has emerged as an important investigative tool in airway diseases. Sputum can be easily induced by ultrasonic nebulization of hypertonic saline. Inprovements in sputum processing have established that sputum provides reproducible measurements of cell counts and fluid phase mediators. Adults and children with stable asthma demonstrate an infiltrate of eosinophils. With an exacerbation of asthma the eosinophil infiltrate increases and the cells become activated in response to cytokines including interleukin-5. A neutrophil infiltrate may accompany some exacerbations. Exacerbations resolve under the influence of corticosteroid therapy. Eosinophils undergo apoptosis and are removed by macrophages. Eosinophilic bronchitis is an important component in up to 20% of patients with chronic cough. Sputum examination promises to be an important technique to facilitate the understanding and management of asthma and cough in adults and children.