Asthma is the most common chronic disease during childhood. While most of characteristic structural changes in asthma have been identified in the large airways, there is a growing recognition of peripheral airway dysfunction as a crucial factor in the development of asthma. This dysfunction is a defining feature in adults with persistent asthma. However, little is known about the contribution of small airway impairment in children with asthma due to the relatively low sensitivity of conventional lung function tests, such as spirometry. Recently, new diagnostic tools that are sensitive to both large and small airway function and inflammation have been introduced in clinical practice. The most widely studied of these tools in preschool and school-aged children is impulse oscillometry (IOS). This review addresses the latest findings on the usefulness of IOS in identifying small airway dysfunction, predicting the risk of uncontrolled asthma, and ultimately improving the diagnosis and management of asthma in children.