Inhaled corticosteroids play an important role in the management of obstructive airway disease, by suppressing airway inflammation that is central to the pathophysiology of these conditions. In asthma there is strong clinical evidence supporting the use of inhaled corticosteroids in mild, moderate, and severe persistent asthma to improve lung function, reduce exacerbations, and prevent death. In chronic obstructive pulmonary disease, inhaled corticosteroids improve symptoms, reduce frequency of exacerbations and hospitalizations, and should be considered in patients with moderate-to-severe airflow limitation who have persistent symptoms despite optimal bronchodilator therapy. Though the adverse effects of corticosteroids are less when given via inhalation than when given systemically, nevertheless, the adverse effects are important and need to be considered. Newer inhaled corticosteroids with better pharmacologic properties are being developed and will probably be available in the near future.