Background: The prevalence of asthma and role of atopy in asthma among children has not been clearly defined in Nigeria. Objective: To determine the prevalence of asthma and investigate risk factors related to allergy sensitization among urban and rural school children in southwest Nigeria. Methods: Validated ISAAC questionnaire was administered to 1736 high school children in randomly selected schools in rural and urban communities. Identified asthma cases were matched to controls. Allergy skin tests, blood eosinophil count, serum IgE and stool examination for parasites were performed. Dust samples from homes were also collected and analyzed for allergens. Results: The prevalence of asthma was 7.5% (95% CI 6.0 to 9.2%) and 8% (95% CI 6.0-10.4%) in the rural and urban communities respectively . Risk factors for asthma included cigarette-smoking, cats in the home and family size. Eosinophil count (109/L) was elevated in asthmatics [0.70 (95% CI 0.48-1.11) vs. 0.32 (95% CI 0.19-0.69); p<0.01], but IgE levels were similar between the two groups (298±229 IU/mL vs. 288±257; p=0.97). Positive skin tests to cat hair, cockroach, mango blossom and mouse epithelium were more frequent in asthmatics than in healthy controls, especially in the rural communities. There was no correlation between allergens in dust collected from homes and skin test reactivity. Conclusion: Asthma prevalence is similar in rural and urban children in Southwest Nigeria and atopy with elevated IgE was not observed to be a major factor for asthma in our cohort of children in both communities.