The risks of exposure to environmental tobacco smoke (ETS) are well established and ‘harm reduction’ strategies such as smoking outside to protect infants and children from exposure to ETS have been advocated for some time. The aim of this study was to assess the validity of self-reported smoking levels in residential settings. The participants were families (n = 92) randomly selected from lower socioeconomic areas of Perth, Western Australia. Each household was monitored for vapor phase nicotine and particulates with an aerodynamic diameter of ≤10 μm (PM10). Of the 42% (39) households who reported that someone smoked cigarettes at home, only four (4%) said that smoking occurred inside the house. There was a ‘moderate’ agreement between parental-reported tobacco smoking and levels of nicotine (κ = 0.55, P < 0.01). There were significant differences in the median levels of air nicotine (P < 0.01) and PM10 (P < 0.05) between households in which smoking was reported as only occurring outside, and the smoke-free households.