Allergoid immunotherapy is a new form of allergen immunotherapy allowing safe administration of high allergen doses. There is limited information on the effects of allergoid immunotherapy in children with allergic rhinitis. To investigate the immunological and clinical effects of allergoid immunotherapy in children with allergic rhinitis due to grass pollen allergy. Children with allergic rhinitis were assigned to allergoid immunotherapy (n = 27) or control (n = 26, no immunotherapy) groups. Children in the immunotherapy group received seven injections of grass pollen allergoid immunotherapy before grass pollen season and continued to receive maintenance immunotherapy for 27 months. All patients were offered a pharmacotherapy regimen to be used on demand during the pollen seasons. Clinical and laboratory parameters were compared between the immunotherapy and control groups. The rhinoconjunctivitis symptom-medication score and asthma symptom score were lower in the immunotherapy group after 1 yr of maintenance immunotherapy (p < 0.01 for both). Skin test reactivity and nasal reactivity as determined by nasal provocation testing for grass pollen were significantly decreased after 1 yr of immunotherapy (p < 0.001 for both). The seasonal increase in bronchial reactivity and nasal lavage eosinophil cationic protein levels were prevented after the first year of immunotherapy (p < 0.05 for both). The seasonal increase in immunoglobulin (Ig)E decreased (p < 0.05) and grass-specific IgG, IgG1 and IgG4 increased significantly already at the end of the seven-injection build-up therapy (p < 0.001, for all). Interleukin (IL)-4 levels in the culture supernatants showed a steady decline from baseline at first and second year of immunotherapy (p < 0.001) but remained unchanged in the control group. Allergoid immunotherapy is an effective method in the treatment of grass pollen-induced allergic rhinitis in children and prevents the seasonal increase in bronchial hyper-reactivity. Changes in specific IgE and IgG levels and decreased IL-4 production in peripheral blood mononuclear cell culture supernatants may account for the observed clinical effects.