Reports have suggested that certain infants are predisposed to wheezing in the first 2 yrs of life due to abnormal lung function, prior to the first wheezing illness. The authors investigated the association between infant lung function and wheeze during the first 2 yrs of life. A cohort of 253 infants was evaluated. Respiratory function assessment was performed at 1, 6, and 12 months of age. Parental history of asthma, atopy, and maternal antenatal smoking habits were recorded. An infant was identified as having wheezed on the basis of parental report and, where possible, physician diagnosis. One hundred and sixty infants (63%) had complete diary and questionnaire information on wheeze available for analysis. Of these: 79 infants (50%) had never wheezed (NW) during the first 2 yrs of life and 81 had reported wheeze (W) (50%). Of those with a report of wheeze, the distribution through the first 2 yrs of life was; 28 during the first year of life only (Y1), 21 in the second year of life only (Y2), and 32 wheezed in both the first and second years of life (Y1&2). At the age of 1 month, prior to any lower respiratory illness, the W group had impaired lung function in comparison to the NW group. In Y1 infants, the neonatal lung function differences resolved by 12 months of age. In Y2 and Y1&2 infants lung function differences persisted throughout the first year of life. Prevalence of parental asthma and maternal antenatal smoking was increased in the W group p=0.001, p=0.008, respectively), in comparison to the NW infants. Maternal antenatal smoking prevalence was increased in the Y2 and Y1&2 infants in comparison to the NW group (p=0.04), (p=0.01), respectively. Wheezing during the first year of life is often a transient condition which improves with time. It appears to be related to early life reduced small airway calibre. Wheezing that begins or persists into the second year of life is usually associated with a different abnormality of the airways. Commencement or persistence of wheeze into the second year of life may be part of the clinical entity recognized as asthma.