As an 'inflammometer', the fraction of nitric oxide in exhaled air (Fe(NO)) is increasingly used in the management of paediatric asthma. Fe(NO) provides us with valuable, additional information regarding the nature of underlying airway inflammation, and complements lung function testing and measurement of airway hyper-reactivity. This review focuses on clinical applications of Fe(NO) in paediatric asthma. First, Fe(NO) provides us with a practical tool to aid in the diagnosis of asthma and distinguish patients who will benefit from inhaled corticosteroids from those who will not. Second, Fe(NO) is helpful in predicting exacerbations, and predicting successful steroid reduction or withdrawal. In atopic asthmatic children Fe(NO) is beneficial in adjusting steroid doses, discerning those patients who require additional therapy from those whose medication dose could feasibly be reduced. In pre-school children Fe(NO) may be of help in the differential diagnosis of respiratory symptoms, and may potentially allow for better targeting and monitoring of anti-inflammatory treatment.