Background: Pulmonary exacerbations in cystic fibrosis are characterized by airway inflammation and may cause irreversible lung damage. Early identification of such exacerbations may facilitate early initiation of treatment, thereby potentially reducing long-term morbidity. Research Question: Is it possible to predict pulmonary exacerbations in children with cystic fibrosis, using inflammatory markers obtained from BAL fluid? Study Design and Methods: A longitudinal analysis was conducted of children aged 0 to 7 years included in the Australian Respiratory Early Surveillance Team for Cystic Fibrosis (AREST CF) study between 2005 and 2015. The association between inflammatory markers from annual BAL fluid and time to pulmonary exacerbation requiring hospital admission in the 6-month period post-BAL was analyzed using Kaplan-Meier curves and Weibull regression, adjusting for annually repeated measurements. Admissions for Pseudomonas eradication were excluded in the main analysis, because of the standard policy in participating centers to treat Pseudomonas in-hospital. Results: Nine hundred seventy-six BAL samples from 308 children were analyzed. After exclusion of admissions for Pseudomonas eradication (n = 43), there were 145 pulmonary exacerbations recorded within 6 months of BAL; median time to exacerbation was 31 days (interquartile range, 9-100). In univariate analyses, high IL-8 (hazard ratio [HR], 2.25 for 75th vs 25th percentile; 95% CI, 1.87-2.72), neutrophil elastase (HR, 3.00; 95% CI, 2.03-4.42), and high neutrophil percentage (HR, 1.80 for 75th vs 25th percentile; 95% CI, 1.56-2.04) were all significantly associated with risk for a pulmonary exacerbation (P < .001). The inflammatory markers remained significant predictors after adjustment for clinical predictive variables. Interpretation: Inflammatory markers in BAL fluid are significant predictors of pulmonary exacerbations in young children with cystic fibrosis. The development of noninvasive measures of lung inflammation may facilitate routine surveillance of cystic fibrosis.