Objective. This study aims to assess potential environmental influences on allergy development in children. Methods. Based on a parent-completed questionnaire survey administered in Hong Kong in 2003 in accordance with the International Study of Asthma and Allergies in Childhood protocol, the prevalence and incidence of asthma and rhinoconjunctivitis of 508 preschool children aged 4 to 6 years in Yuen Long District were determined and a range of indoor and outdoor environmental factors were assessed. Results. Exposure to moisture and mold in the first year of life increased the risk of asthma (adjusted odds ratio [aOR] = 2.56; 95% confidence interval [CI] = 1.40-4.68) and rhinoconjunctivitis (aOR = 2.09; 95% CI = 1.15-3.80). Current maternal smoking was also associated with a higher prevalence of asthma (aOR = 2.00; 95% CI = 1.04-3.84). No association was observed between outdoor traffic-related air pollutants and the prevalence of the allergic conditions. Conclusion. Indoor home environments had a stronger influence on allergy development, whereas exposure to traffic-related external environment gave a variable effect, the significance of which would be difficult to be substantiated.