Asthma and chronic obstructive pulmonary disease (COPD) are both highly prevalent conditions that can coexist in the same individual: the so-called ‘asthma -COPD overlap’ (ACO). Its prevalence and prognosis vary widely depending on how ACO is defined in each publication, the severity of bronchial obstruction of patients included and the treatment they are receiving. Although there is a lack of evidence about the biology of ACO, the overlap of both diseases should express a mixture of a Th1 inflammatory pattern (characteristic of COPD) and a Th2 signature (characteristic of asthma). In this review we support a novel algorithm for ACO diagnosis proposed by the Spanish Respiratory Society (SEPAR), based on a sequential evaluation that considers: (a) the presence of chronic airflow limitation in a smoker or ex-smoker patient ⩾35 years old; (b) a current diagnosis of asthma; and (c) the existence of a very positive bronchodilator test (PBT; ⩾15% and ⩾400 ml) or the presence of eosinophilia in blood (⩾300 eosinophils/μl). This algorithm can identify those patients who may benefit from a treatment with inhaled corticosteroids (ICSs) and maybe from biological drugs in a near future. In addition, it is easily applicable in clinical practice. The major disadvantage is that it groups patients with very different characteristics under the ACO’s umbrella. In view of this heterogeneity, we recommend a strategy of defining specific and measurable therapeutic objectives for every single patient and identifying the traits that can be treated to achieve those objectives.