Several short-term studies have shown that inhaled steroids can reduce airway hyperresponsiveness in asthma. To evaluate whether prolonged treatment can bring about full recovery, this double-blind, randomized, controlled trial examined the effect of budesonide, 400 μg daily for 1 yr, on airway hyperresponsiveness. The time course and characteristics of improvements and associated changes in clinical asthma severity were also evaluated. Thirty-two stable adult asthmatics, requiring bronchodilators alone, were selected. Before and monthly throughout the study, airway responsiveness to methacholine was measured and clinical asthma severity assessed by questionnaire, daily bronchodilator use, and number of asthma exacerbations. Patients receiving budesonide showed a fourfold mean improvement in airway responsiveness compared with those receiving placebo (p < 0.0005), whose responsiveness remained very stable. Fifteen of the 16 budesonide subjects improved and 5 returned to the normal range. Largest improvements occurred during the first 3 months but, in some, were still progressing slowly at 1 yr. Improvements in responsiveness were accompanied by significant improvements in asthma symptoms, bronchodilator use, and number of asthma exacerbations. The results show that regular, prolonged use of inhaled steroid can produce marked improvements in airway hyperresponsiveness, sometimes with full resolution, and these improvements are accompanied by clinically significant improvements in clinical asthma.