Background. Bacterial endotoxin is known to induce interferon γ and interleukin 12 production, and therefore has the potential to decrease allergen sensitisation. To find out the role of early chronic endotoxin exposure in the development of allergen sensitisation and asthma, we compared concentrations of endotoxin in house dust with allergen sensitisation in infants at high risk for developing asthma. Methods. 61 infants 9-24 months old with at least three physician-documented episodes of wheezing were studied. Concentrations of house-dust endotoxin and allergens were measured in the infants' homes. Allergen sensitisation was measured by skin-prick testing with a panel of common inhalant and food allergens. In a subset of these infants. proportions of T lymphocytes producing interferon γ, and interleukins 4, 5, and 13 were calculated by cell-surface and intracellular cytokine staining, with flow cytometry. Findings. House-dust endotoxin concentrations ranged from 104 to 10,000 endotoxin units (EU) per mL (geometric mean 912 EU/mL). Concentrations did not vary significantly over a 6-month interval. Ten infants (16%) were sensitised to at least one allergen. The homes of allergen-sensitised infants contained significantly lower concentrations of house-dust endotoxin than those of non-sensitised infants (mean 468 vs 1035 EU/mL, respectively; p = 0.01). Increased house-dust endotoxin concentrations correlated with increased proportions of interferon-γ-producing CD4 T cells (p = 0.01). Such concentrations did not correlate with proportions of cells that produced interleukins 4, 5, or 13. Interpretation. This study may provide the first direct in-vivo evidence that indoor endotoxin exposure early in life may protect against allergen sensitisation by enhancing type 1 immunity.