Studies have reported contradictory effects of cat and dog exposure on allergy, resulting in inconsistent recommendations on animal avoidance. We conducted a systematic review of observational studies published in English from 2000 to January 2009. It shows in this review that the reported exposure-response relationships are contradictory. A total of 17 and 13 birth cohort studies on cat and dog exposure, respectively, are included in the review. Most of the birth cohort studies found that cat or dog exposure in early life had no effect on the development of asthma or wheezing symptoms and dog exposure during infancy was found to protect children from developing sensitization against aeroallergens. A total of 7 and 6 prospective studies in school-age children or adults on cat and dog exposure, respectively, are included in this review and most of these studies suggested an inverse association between cat exposure and asthma and wheezing symptoms. As for cross-sectional studies, 26 and 21 studies on cat and dog exposure, respectively, are included in this review, which cover a broad range of age groups and geographical areas, and reported inconsistent results. The evidence summarised in this systematic review needs to be interpreted with caution, the inconsistent study results may be due to study design, exposure assessment, and avoidance measure. The exposure-response relationships may also alter in geographical areas where the community prevalence of cats and dogs are significantly different. However, as the evidence of the effects of pet keeping on subsequent development of asthma or allergic diseases presented in this review are not overwhelmingly strong, the decision of whether to keep a cat or a dog in the family should be based on arguments other than the concern of developing asthma and allergy.