Background The combination of genetic susceptibility and environmental factors induce allergic sensitization and subsequently local inflammation, resulting in atopic manifestations. Objective To examine whether immunological features reflecting sensitization (total and specific IgE levels, allergen-induced proliferative responses and skin tests) and markers of inflammation (plasma sE-selectin and blood eosinophils) are related to the clinical expression of atopy and whether they precede atopic disease in children up to 2 years of age. Methods The development of these markers during the first 2 years of life was studied prospectively in 133 newborns at high risk to develop atopic disease. Results The prevalence of atopic disease increased from 25 percent at 12 months to 32 percent at 24 months of age. The children with food allergy at 12 months, who all had atopic dermatitis (AD), turned out to have asthma-like disease in 40 percent and AD in 100 percent at the age of 24 months. Total IgE levels increased with time and from 12 months onward levels started to differ markedly between atopics and nonatopics. Food-specific IgE antibodies were significantly associated with AD (relative risk [RR] = 2.39), food (RR = 1.32) and upper-airway allergy (RR = 1.20), and house dust mite-specific IgE antibodies with upper-airway allergy (RR = 5.00). A positive skin test was significantly associated with AD (RR = 2.90) and food allergy (RR = 1.36). The inflammation markers investigated, were not related to the clinical expression or preceded atopic disease at 2 years of age in high-risk children. Conclusion Positive skin tests and specific IgE to food or inhalant allergens were related to the clinical expression of different atopic diseases. The combination of AD and food allergy at 12 months reflected the strongest risk factor in this high risk cohort for the development of asthma-like disease at 24 months of age.