BACKGROUND The relation between respiratory illnesses in early life and the development of asthma and atopy in childhood is incompletely understood. OBJECTIVE We sought to examine the relationship between respiratory illnesses in early life and atopic diseases at school age. METHODS We performed a prospective birth cohort study of the relationship between respiratory illnesses in the first year of life and asthma, atopy (sensitization to >or=1 allergen), and allergic rhinitis at school age in 440 children with a parental history of atopy. Logistic regression was used to examine the relationship between respiratory illnesses and asthma, atopy, and allergic rhinitis. The relationship between respiratory illnesses in early life and repeated measures of wheezing between the ages of 1 and 7 years was investigated by using a proportional hazards models. RESULTS Physician-diagnosed croup (adjusted odds ratio [OR], 0.30; 95% CI, 0.12-0.72) and having 2 or more physician-diagnosed ear infections (adjusted OR, 0.58; 95% CI, 0.35-0.98) in the first year of life were inversely associated with atopy at school age. Physician-diagnosed bronchiolitis before age 1 year was significantly associated with asthma at age 7 years (adjusted OR, 2.77; 95% CI, 1.23-6.22). Recurrent nasal catarrh (>or=3 episodes of a runny nose) in the first year of life was associated with allergic rhinitis at age 7 years (adjusted OR, 2.99; 95% CI, 1.03-8.67). CONCLUSION The relationship between early-life respiratory illnesses and asthma and atopy is complex and likely dependent on the type of infection and immune response it initiates. CLINICAL IMPLICATIONS Certain respiratory illnesses in early life modify the risk of atopy and asthma at school age.