Although asthma is clearly associated with a systemic propensity for allergic T helper type 2 (Th2) cell cytokine responses, independent local immune events appear to be responsible for the development of allergic airways inflammation. There is growing interest in how local immune networks interact with resident airway cell populations such as epithelial cells, which are now also recognized as key producers of cytokines, chemokines and growth factors. As well as their recognized role in airway remodelling, epithelial cells are now thought to have a role in initiating events. This review examines the role of cytokines produced by these and other cells in the development of asthma. It also highlights emerging concepts that the excessive and inappropriate immune responses seen in allergic disease may be related to dysfunction of various interleukin-10 producing regulatory cell populations.