During the summer of 1994, a cross-sectional epidemiological study, in which the pulmonary function of children in Tehran was compared with pulmonary function in children in a rural town in Iran, was conducted. Four hundred children aged 5-11 y were studied. Daytime ambient nitrogen dioxide, sulfur dioxide, and particulate matter were measured with portable devices, which were placed in the children's neighborhoods on the days of study. Levels of these ambient substances were markedly higher in urban Tehran than in rural areas. Children's parents were questioned about home environmental exposures (including heating source and environmental tobacco smoke) and the children's respiratory symptoms. Pulmonary function was assessed, both by spirometry and peak expiratory flow meter. Forced expiratory volume in 1 s and forced vital capacity-as a percentage of predicted for age, sex and height-were significantly lower in urban children than in rural children. Both measurements evidenced significant reverse correlations with levels of sulfur dioxide, nitrogen dioxide, and particulate matter. Differences in spirometric lung function were not explained by nutritional status, as assessed by height and weight for age, or by home environmental exposures. Reported airway symptoms (i.e., cough, phlegm, and wheeze) were higher among rural children, whereas reported physician diagnosis of bronchitis and asthma were higher among urban children. The association between higher pollutant concentrations and reduced pulmonary function in this urban-rural comparison suggests that there is an effect of urban air pollution on short-term lung function and/or lung growth and development during the preadolescent years.