Recent studies have shown that initial sensitization to airborne environmental allergens occurs typically in early childhood, but subsequent progression to persistent atopic asthma, which may not manifest for several years, is restricted to only a subset of atopics. The key to establishing the link between atopy and asthma lies in the development of persistent inflammation in the airway wall, resulting in structural and functional changes in local tissues which are responsible for the symptoms of the disease. This review summarizes recent findings on the nature of the cellular and molecular mechanisms underlying this process, and addresses the issue of why the intensity and duration of these tissue-damaging responses in the airway wall apparently exceeds the critical threshold required for development of persistent asthma in only a minority of allergy sufferers.