We review the literature indicating that the adverse health effects of ambient particulate matter involve the generation of oxidative stress and inflammation, as well as immunomodulating effects by particle-associated chemicals. We discuss evidence that diesel exhaust particle organic extracts induce reactive oxygen species in macrophages and bronchial epithelial cells, two key cell types targeted by particulate matter in the lung. Reactive oxygen species activate the promoters of cytokines and chemokines involved in allergic inflammation through activator protein-1 and nuclear factor- kappaB signaling pathways, which may explain exacerbation of allergic inflammation. Organic diesel exhaust particle chemicals also induce apoptosis and necrosis in bronchial epithelial cells via a mitochondrial pathway. This may be responsible for epithelial shedding and bronchial hyperreactivity in asthma.