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The objectives of this study was to examine asthma prescription patterns in young children and the association between outcomes and controller therapy adherence. A retrospective cohort study was conducted using a U.S. multi-managed care plan database (1998–2004; PharMetrics). Inclusion criteria were: age ≤4 years, asthma diagnosis, asthma medication, and 2 years of enrollment. The association between asthma treatment regimens and exacerbation rates (≥1 emergency department visit or hospitalization) were assessed and compared with respect to controller therapy adherence using multivariate logistic regression. The majority of the 11,407 asthma patients were male (58.7%); mean age was 2.2 years. Most common initial treatments (alone or in combination) were short-acting β₂-adrenergic agonists (80.2%) and oral corticosteroids (34.2%); nebulized inhaled corticosteroid (ICS) was the most commonly prescribed initial controller therapy (4.9%). Fewer patients prescribed nebulized ICS as initial therapy (n = 553) had exacerbations (25.1%) versus those prescribed it as second- (n = 955; 29.3%) or third-line therapy (n = 514; 40.9%). Patients more adherent with controller medications had a decrease in exacerbations (23.2% vs. 16.8%, p = 0.001); those less adherent had a smaller decrease (23.1% vs. 19.1%, p = 0.049). Patients more adherent with nebulized ICS had a decrease in exacerbations (25.3% vs. 18.6%, p = 0.020); those less adherent did not (20.1% vs. 20.8%, p = 0.814). Greater nebulized ICS adherence significantly protected against exacerbations (OR = 0.6; 95% CI 0.37–0.99), while greater overall controller adherence showed a similar trend (OR = 0.8; 95% CI 0.59–1.10). In young children, earlier initiation of nebulized ICS and adherence with controller therapies were associated with significantly lower emergency department/hospitalization rates.