Background: Children with asthma may have a disease course with or without exacerbations, but the relationship between exacerbations and lung function development is poorly understood. Objective: To compare lung function trajectories from birth till adolescence in asthmatic children with and without exacerbations. Methods: Children with asthma from the Copenhagen Prospective Studies on Asthma in Childhood₂₀₀₀ (COPSAC₂₀₀₀) birth cohort had lung function and bronchial reactivity assessed repeatedly from 1 month to 13 years. Exacerbations were diagnosed at the COPSAC clinic defined as symptoms requiring hospitalization, oral or high-dose inhaled corticosteroid treatment. Mixed models were applied to analyze lung function trajectories. Results: Children with asthma with exacerbations (N = 50) had a trajectory of increased, fixed airway obstruction compared with children without exacerbations (N = 47): z-score difference in airway resistance (sRaw_z) (95% confidence interval [CI]): +0.34 (+0.03; +0.66), P = .03, and maximal mid-expiratory flow (MMEF_z): −0.41 (−0.69; −0.13), P = .004, but no differences in forced expiratory volume (FEV_z): −0.14 (−0.41; +0.13), P = .29, or bronchial reactivity to methacholine (PD_z): +0.08 (−0.26; +0.42), P = .65. This did not change comparing lung function trajectories before and after exacerbations: z-score difference (95% CI) sRaw_z: −0.04 (−0.35; 0.27), P = .80; MMEF_z: 0.01 (−0.02; 0.04), P = .55; FEV_z: 0.02 (−0.02; 0.05), P = .42; and PD_z: −0.01 (−0.06; 0.05), P = .88. Conclusion: Children with asthma with exacerbations compared with children with asthma without exacerbations are characterized by increased airway obstruction since infancy through childhood. The airway obstruction is a fixed trajectory without progression due to exacerbations, suggesting that exacerbations are a consequence rather than a cause of diminished airway caliber in childhood.