Asthma and chronic obstructive pulmonary disease (COPD) are two common illnesses that cause significant morbidity and mortality. Steroids are widely used in both conditions. They act through steroid or glucocorticoid receptors (GR) causing up or down regulation of protein synthesis resulting in an increase in lipocortin 1 and beta 2 adrenergic receptors, and decreased levels and activities of cytokines or cytokine receptors, which reduces the inflammatory process in the airways and decreases bronchial hyperreactivity. Consequently symptoms of airway obstruction are alleviated and lung function is improved. In asthma, steroids have been convincingly shown to be effective in the treatment of both acute exacerbations and chronic condition. In COPD, however, only a subset of patients seem to respond favourably to steroid therapy. Therapeutic trials are therefore recommended before committing to a long-term treatment in order to determine this subset of patients, as no markers of steroid responsiveness can be identified. The inhaled steroids currently available have a good safety profile with significant side effects occurring only occasionally. Such side effects are usually confined to the oropharynx, causing local irritation, candidiasis and dysphonia, which can be easily overcome. Biochemical abnormalities involving bone, adrenal, carbohydrate and lipid profiles have been noted with high doses of inhaled steroids; however, these have no significant clinical effects.