To identify the role of endotoxin in grain dust-induced lung disease, we conducted a population-based, cross-sectional investigation among grain handlers and postal workers. The study subjects were selected by randomly sampling all grain facilities and post offices within 100 miles of Iowa City. Our study population consisted of 410 grain workers and 201 postal workers. Grain workers were found to be exposed to higher concentrations of airborne dust (p = 0.0001) and endotoxin (p = 0.0001) when compared with postal workers. Grain workers had a significantly higher prevalence of work-related (cough, phlegm, wheezing, chest tightness, and dyspnea) and chronic (usual cough or phlegm production) respiratory symptoms than postal workers. Moreover, after controlling for age, gender, and cigarette smoking status, work-related respiratory symptoms were strongly associated with the concentration of endotoxin in the bioaerosol in the work setting. The concentration of total dust in the bioaerosol was marginally related to these respiratory problems. After controlling for age, gender, and cigarette smoking status, grain workers were found to have reduced spirometric measures of airflow (FEV1, FEV1/FVC, and FEF25-75) and enhanced airway reactivity to inhaled histamine when compared with postal workers. Although the total dust concentration in the work environment appeared to have little effect on these measures of airflow obstruction, higher concentrations of endotoxin in the bioaerosol were associated with diminished measures of airflow and enhanced bronchial reactivity. Our results indicate that the concentration of endotoxin in the bioaerosol may be particularly important in the development of grain dust-induced lung disease.