Few studies have examined concurrent exposure to household endotoxin and traffic-related air pollution in relation to childhood asthma, yet both factors are associated with asthma outcomes. To examine whether proximity to a major roadway (a traffic-related air pollution proxy) modifies the estimated effects of indoor endotoxin on asthma outcomes in children. Cross-sectional study of 200 children with asthma (ages, 6-14 years) living in Puerto Rico. Residential distance to a major roadway was calculated as the distance from the participant's residential US census block centroid to the nearest major road. The outcomes of interest were severe asthma exacerbations, missed school days for asthma, atopy, lung function, and bronchodilator response (BDR). Logistic, linear, or negative binomial regression was used for the multivariable analysis. In the multivariable analysis, there was an interaction between indoor endotoxin and residential distance to a roadway on severe asthma exacerbations (P = .02) and BDR (P = .07). In an analysis stratified by distance to a roadway, each log10-unit increase in endotoxin was associated with 4.21 times increased odds of severe asthma exacerbations among children living within 499 m (the lower 3 quartiles of residential distance) to a road (95% confidence interval, 1.5-12.0). Among subjects living further than 499 m away from a roadway, each log10-unit increase in endotoxin was associated with reduced odds of severe asthma exacerbations (odds ratio, 0.03; 95% confidence interval, 0.001-0.67). Similar but less substantial findings were observed for BDR. Our findings suggest that residential proximity to a major road modifies the estimated effect of endotoxin on severe asthma exacerbations in children.