The study included 162 second-grade children (85 boys and 77 girls) aged 8-9 years, attending two schools in an area with a fertilizer production plant, and 59 second-graders of the same age (32 boys and 27 girls) from a small neighbouring town located 20 km west of the plant, without any particular source of pollution. During the period from December 1990 to May 1991 the incidence of acute respiratory diseases was surveyed in children and their family members, and forced expiratory volumes were measured in selected second-graders in December 1990 and April 1991. In the area with the fertilizer plant as well as in the compared area ammonia, hydrogen fluoride, nitrogen dioxide, total suspended particulate matter and smoke were measured daily in ambient air and inside the school buildings. The mean concentrations of pollutants during the study period were below the recommended limits, with only a few exceptions, but daily fluctuations, particularly of ammonia and hydrogen fluoride in the area around the plant happened to exceed these values. The observed differences in the levels of air pollution correlated to some extent with the health parameters followed up during the study period. The incidence of acute respiratory diseases corresponded to the registered differences in the exposure to measured pollutants. Forced expiratory volume values in the compared groups of children did not consistently reflect the differences in exposure levels.