Measurements were made of ventilatory function, arterial blood gas composition, diffusing capacity, and pulmonary circulation in 15 patients with bronchial asthma. There was a variable degree of airway obstruction, hypoxemia, CO2 retention, pulmonary hypertension, and slight reduction of the diffusing capacity. The results are contrasted with those observed previously in chronic pulmonary emphysema. The only test which consistently distinguished between the 2 diseases was the diffusing capacity. This was always severely reduced in emphysema, but normal or only moderately reduced in asthma. This finding is interpreted as a reflection of destruction of alveolar capillaries in emphysema and a relatively normal alveolar capillary surface in asthma.