Exhaled nitric oxide (FE(NO)) has been proposed as a noninvasive marker of airway inflammation in asthma, and may reflect airway eosinophilia. We examined the relationship between FE(NO) and eosinophilic inflammation in endobronchial biopsies from 31 children with difficult asthma (mean age [range] 11.9 [6-17] yr), following 2 wk of prednisolone (40 mg/d). Endobronchial biopsy was also performed in seven children without asthma. Biopsy eosinophils were detected using antibody to major basic protein, and point-counting used to derive an "eosinophil score." FE(NO) readings and suitable biopsies for analysis were both obtained in 21 of 31 children with asthma. Adherence to prednisolone was demonstrated in 17 of these 21. Within this group, there was a correlation between FE(NO) and eosinophil score (r = 0.54, p = 0.03). The relationship was strongest in patients with persistent symptoms after prednisolone, in whom FE(NO) > 7 ppb was associated with a raised eosinophil score. For all patients, FE(NO) < 7 ppb was associated with an eosinophil score within the nonasthmatic range, regardless of symptoms. We propose that FE(NO) is associated with eosinophilic inflammation in children with difficult asthma, following prednisolone, and may help in identifying patients in whom persistent symptoms are associated with airway eosinophilia.