Air pollution is widely understood to be capable of exacerbating asthma symptoms. Here we examined the association between traffic-related air pollution and development of asthma in school children. Subjects were 10,069 school children in their first through third years of compulsory education (6-9-year old). The main outcome was incidence of asthma as determined from the questionnaire. Follow-up surveys were conducted every year up to 4 years after the end of the study. To evaluate individual level of exposure to traffic-related air pollution, we used a simulation model that accounted for exposure level both at home and at school. As surrogates of traffic-related air pollution, the estimation target was the annual average individual exposure of automobile exhaust-originating nitrogen oxides (NOx) and elemental carbon (EC). Confounding factors were adjusted using a discrete-time logistic regression model. We found a positive association between exposure to EC and incidence of asthma. The odds ratio (OR) (95% confidence interval) for asthma incidence was 1.07 (1.01-1.14) for each 0.1 μg/m3 EC and 1.01 (0.99-1.03) for each 1 p.p.b. NOx. Traffic-related air pollution is associated with development of asthma in school children.