While the pharmacological management of chronic obstructive pulmonary disease (COPD) has evolved from the drugs used to treat asthma, the treatment models are different and the two diseases require clear differential diagnosis in order to determine the correct therapeutic strategy. In contrast to the almost universal requirement for anti-inflammatory treatment of persistent asthma, the efficacy of inhaled corticosteroids (ICS) is less well established in COPD and their role in treatment is limited. There is some evidence of a preventive effect of ICS on exacerbations in patients with COPD, but there is little evidence for an effect on mortality or lung function decline. As a result, treatment guidelines recommend the use of ICS in patients with severe or very severe disease (forced expiratory volume in 1 second <50% predicted) and repeated exacerbations. Patients with frequent exacerbations — a phenotype that is stable over time — are likely to be less common among those with moderate COPD (many of whom are managed in primary care) than in those with more severe disease. The indiscriminate use of ICS in COPD may expose patients to an unnecessary increase in the risk of side-effects such as pneumonia, osteoporosis, diabetes and cataracts, while wasting healthcare spending and potentially diverting attention from other more appropriate forms of management such as pulmonary rehabilitation and maximal bronchodilator use. Physicians should carefully weigh the likely benefits of ICS use against the potential risk of side-effects and costs in individual patients with COPD.