Although atopic dermatitis is the most common inflammatory dermatosis affecting children, no previous studies have evaluated the relationship between disease severity and the referral pattern to secondary health care services. We carried out a cross-sectional survey of 1760 children aged 1–5 years selected from the age–sex registers of four urban and semiurban general practices in Nottingham. Atopic dermatitis was diagnosed by a dermatologist on the basis of symptoms and signs of a flexural itchy rash that had been present in the previous 12 months. The severity of atopic dermatitis was assessed clinically by the same dermatologist on the basis of reported symptoms over the previous 12 months and clinical signs, and was graded on a three-point scale as mild, moderate or severe. Information on the use of primary and secondary health care services was recorded at the time of the interview. The 1-year period prevalence of atopic dermatitis was 16.5% (95% confidence interval 14.7–18.2%). The severity distribution of atopic dermatitis was: mild 84% (n = 242), moderate 14% (n = 41) and severe 2% (n = 7). Of those children with atopic dermatitis, 96% (n = 278) had consulted their general practitioner in the previous 12 months and 6% (n = 17) had been seen in secondary care. Overall, 4% (n = 11) of those children with atopic dermatitis had a consultation with a dermatologist. Other sources of secondary care referral included the paediatric department (n = 2) and accident and emergency department (n = 6). Referral to secondary care was found to be positively related to disease severity, with referral occurring in 3% of mild cases, 15% of moderate cases and 43% of severe cases. Although the relative referral rate of mild and moderately severe disease was low, these cases were found to represent a significant proportion (82%) of the total numbers of children seen in secondary care. This study has shown that: (i) most cases of atopic dermatitis in the community are mild in severity; (ii) referral to secondary health care services by general practitioners is infrequent; (iii) disease severity is an important determinant of referral to secondary care; and (iv) any potential change in the referral pattern of mild/moderate cases of atopic dermatitis to secondary care is likely to produce a significant increase in workload for dermatology departments.