Inhaled corticosteroids can prevent acute exacerbations and emergency visits when used as part of a chronic care plan for long-term control of asthma, but low patient adherence and inadequate provider prescribing (clinical inertia) can limit these benefits. State Medicaid programs are a major source of insurance coverage for low-income children, paying for medications and preventive care, as well as bearing the cost of adverse outcomes for common chronic conditions in childhood, such as asthma. This study measured the incidence and timing of emergency department (ED) visits in the first 90 days after an initial inhaled corticosteroid prescription (ICS-Rx) among 43,156 Medicaid-enrolled children with a diagnosis of asthma in 14 southern states in 2007. One in 5 children (19.6%) with asthma had at least 1 ED visit in the first 90 days after initial ICS-Rx; 10% of these visits occurred within the first 48 hours, and 25% occurred within the first week. Continued ICS-Rx use was associated with lower risk of an ED visit. There were no racial differences in the ED visit rates. Initial ICSRx for Medicaid-enrolled children is a warning flag for short-term risk of asthma-related ED visits, whereas continued ICS-Rx use is protective for at least 90 days. Primary care follow-up may be needed within the first 2 days after initial ICS-Rx to prevent adverse outcomes. Medicaid programs could use claims data for surveillance of adherence to guideline-concordant therapy and for sentinel events marking windows of a higher risk for ED visits.