Asthma is traditionally defined as a chronic disease characterized by bronchial hyper-responsiveness and lung inflammation. The airway inflammation and remodelling together likely explain the clinical manifestations of asthma. The mechanisms by which the external environmental cues, together with the complex genetic actions, propagate the inflammatory process that characterizes asthma are beginning to be understood. There is also an evolving awareness of the active participation of structural elements, such as the airway epithelium, airway smooth muscle, and endothelium, in this process; these structural elements within the lung and the bone marrow serve as reservoirs for and the source of inflammatory cells and their precursors. Although often viewed as separate mechanistic entities, so-called innate and acquired immunity often overlap in the propagation of the asthmatic response. This review examines the newer information on the pathophysiologic characteristics of asthma and focuses on the role of airway epithelium in the exacerbation of the disease.