Difficult childhood asthma is defined by persistent symptoms despite maximal conventional therapy. We aimed to establish a safe method of sputum induction for these children and to study cytology and the relationship to exhaled nitric oxide (eNO). Sputum induction was performed in 38/40 children (aged 6–16 years) with difficult asthma, using 3.5% saline for four 5-min periods after bronchodilator pretreatment. Two children were excluded from sputum induction because postbronchodilator forced expired volume in 1 sec (FEV1) was 20% from postbronchodilator FEV1, readily reversed with salbutamol. Sputum induction was successful in 28/38 children, with a higher success rate in children ≥ 12 years than in younger children (87% vs. 50%, P = 0.02). Only 9/28 had abnormal sputum cytology; of these, 6 had predominant sputum eosinophilia (>2.5% eosinophils, ≤54% neutrophils), while 3 had sputum neutrophilia (≤2.5% eosinophils, >54% neutrophils). Of 23 children with elevated eNO values, only 6 had sputum eosinophilia. In conclusion, sputum induction can be used to assess airway inflammation in children with difficult asthma, but abnormal sputum cytology is only present in a minority. Raised nitric oxide is only poorly predictive of sputum eosinophilia in these children. Pediatr Pulmonol. 2005; 39:318–324. © 2005 Wiley-Liss, Inc.