Background: Evidence for an association between traffic-related air pollution and allergic disease is inconsistent, possibly because the adverse effects may be limited to susceptible subgroups and these have not been identified. This study examined children in the Childhood Asthma Prevention Study (CAPS), potentially susceptible to air pollution effects because of a family history of asthma. Methods: We examined cross-sectional associations at age eight years between road density within 75 m and 50 m of home address weighted by road type (traffic density), as a proxy for traffic-related air pollution, on the following allergic and respiratory outcomes: skin prick tests (SPTs), total and specific serum IgE, pre- and post-bronchodilator lung function, airway hyperresponsiveness, exhaled NO, and reported asthma and rhinitis. Results: Weighted road density was positively associated with allergic sensitisation and allergic rhinitis. Adjusted relative risk (RR) for house dust mite (HDM) positive SPT was 1.25 (95% CI: 1.06-1.48), for detectable house dust mite-specific IgE was 1.19 (95% CI: 1.01-1.41) and for allergic rhinitis was 1.30 (95% CI: 1.03-1.63) per 100 m local road or 33.3 m motorway within 50 m of home. Associations were also seen with small decrements of peak and mid-expiratory flows and increased risk of asthma, current wheeze and rhinitis in atopic children. Conclusion: Associations between road density and allergic disease were found in a potentially susceptible subgroup of children at high risk of developing atopy and asthma.