Rationale: Daycare exposes young children to more infections early in life, and may thereby prevent the development of asthma and allergy. Objective: To prospectively study the effect of daycare on the development of asthma and allergic sensitization during the first 8 years of life. Methods: In the PIAMA birth cohort 3963 newborn children were followed prospectively for 8 years. Daycare use and respiratory health were assessed yearly by questionnaires. At 8 years, sensitization to airborne allergens and airway responsiveness were measured. Daycare was defined as early (age 0-2), late (age 2-4) or none (no daycare before age 4). Associations of daycare and/or older siblings with asthma symptoms (wheezing, shortness of breath, and inhaled steroids taken in the last year), airway responsiveness and allergic sensitization were assessed in a longitudinal repeated-event analysis. Results: Children with early daycare had more wheezing in the first years of life, but less wheezing and steroid use between 4 and 8 years. At 8 years, early daycare was not protective for asthma symptoms (adjusted odds ratio, aOR 0.99, 95% CI 0.74-1.32), allergic sensitization (aOR 0.86, 0.63-1.18) or airway hyperresponsiveness (aOR 0.80, 0.57-1.14). The transient reduction in airway symptoms between age 4 and 8 years was only observed in children without older siblings. Conclusion: Early daycare is associated with an increase in airway symptoms until the age of 4, and fewer symptoms between 4 and 8 years. We found no protection against asthma symptoms, hyperresponsiveness or allergic sensitization at the age of 8 years.