Ciclesonide is an onsite-activated inhaled corticosteroid (ICS) for the treatment of asthma. This study compared the efficacy, safety and effect on quality of life (QOL) of ciclesonide 160 μg (ex-actuator; nominal dose 200 μg) vs. budesonide 400 μg (nominal dose) in children with asthma. Six hundred and twenty-one children (aged 6–11 yr) with asthma were randomized to receive ciclesonide 160 μg (ex-actuator) once daily (via hydrofluoroalkane metered-dose inhaler and AeroChamber PlusTM spacer) or budesonide 400 μg once daily (via Turbohaler®) both given in the evening for 12 wk. The primary efficacy end-point was change in forced expiratory volume in 1 s (FEV1). Additional measurements included change in daily peak expiratory flow (PEF), change in asthma symptom score sum, change in use of rescue medication, paediatric and caregiver asthma QOL questionnaire [PAQLQ(S) and PACQLQ, respectively] scores, change in body height assessed by stadiometry, change in 24-h urinary cortisol adjusted for creatinine and adverse events. Both ciclesonide and budesonide increased FEV1, morning PEF and PAQLQ(S) and PACQLQ scores, and improved asthma symptom score sums and the need for rescue medication after 12 wk vs. baseline. The non-inferiority of ciclesonide vs. budesonide was demonstrated for the change in FEV1 (95% confidence interval: −75, 10 ml, p = 0.0009, one-sided non-inferiority, per-protocol). In addition, ciclesonide and budesonide showed similar efficacy in improving asthma symptoms, morning PEF, use of rescue medication and QOL. Ciclesonide was superior to budesonide with regard to increases in body height (p = 0.003, two-sided). The effect on the hypothalamic–pituitary–adrenal axis was significantly different in favor of ciclesonide treatment (p < 0.001, one-sided). Both ciclesonide and budesonide were well tolerated. Ciclesonide 160 μg once daily and budesonide 400 μg once daily were effective in children with asthma. In addition, in children treated with ciclesonide there was significantly less reduction in body height and suppression of 24-h urinary cortisol excretion compared with children treated with budesonide after 12 wk.