Ninety six middle aged male patients with chronic bronchitis with relatively well preserved ventilatory function who were resident in Queensland, New South Wales, or Victoria took part in a prospective study to determine the relationship of various factors to the rate of decline of the FEV1. Thirty of the subjects withdrew, leaving 66 to be followed for four to six years. The mean rate of decline of the FEV1 was 58.6 (SD 51.4) ml/year. The subjects' ventilatory responses to bronchodilator and to methacholine (measures of bronchial lability) were significantly related to each other and to sputum eosinophilia. With a linear model for the data on 57 patients who had methacholine and skin tests the rate of decline of the FEV1 was found, after adjustment had been made for other variables, to be significantly related to State of residence, current smoking, response to bronchodilator, age, and occupational exposure to dust. Response to bronchodilator was interchangeable with response to methacholine. With the five variables in the model none of the following factors was related to the rate of decline of the FEV1:FEV1 on entry, FEV1% predicted normal, FEV1/VC%, skin test reaction, occupation on entry, history of sinusitis and rhinitis, and height. When data from all 66 subjects were introduced into the model, in addition to the five significant individual variables (FEV1/VC% X response to bronchodilator) was significantly related to the rate of decline of the FEV1. Of these prognostic indices, response to bronchodilator was independent of the initial FEV1, FEV/VC%, and FEV1% predicted. The difference between States, which was not explained by differences due to sampling or withdrawal of subjects, was due to a low rate of decline in Queensland.