Airway inflammation is a major contributing factor in both asthma and chronic obstructive pulmonary disease (COPD) and represents an important target for treatment. Inhaled corticosteroids (ICS) as monotherapy or in combination therapy with long-acting β2-agonists or long-acting muscarinic antagonists are used extensively in the treatment of asthma and COPD. The development of ICS for their anti-inflammatory properties progressed through efforts to increase topical potency and minimise systemic potency and through advances in inhaled delivery technology. Budesonide is a potent, non-halogenated ICS that was developed in the early 1970s and is now one of the most widely used lung medicines worldwide. Inhaled budesonide's physiochemical and pharmacokinetic/pharmacodynamic properties allow it to reach a rapid and high airway efficacy due to its more balanced relationship between water solubility and lipophilicity. When absorbed from the airways and lung tissue, its moderate lipophilicity shortens systemic exposure, and its unique property of intracellular esterification acts like a sustained release mechanism within airway tissues, contributing to its airway selectivity and a low risk of adverse events. There is a large volume of clinical evidence supporting the efficacy and safety of budesonide, both alone and in combination with the fast- and long-acting β2-agonist formoterol, as maintenance therapy in patients with asthma and with COPD. The combination of budesonide/formoterol can also be used as an as-needed reliever with anti-inflammatory properties, with or without regular maintenance for asthma, a novel approach that is already approved by some country-specific regulatory authorities and currently recommended in the Global Initiative for Asthma (GINA) guidelines. Budesonide remains one of the most well-established and versatile of the inhaled anti-inflammatory drugs. This narrative review provides a clinical reappraisal of the benefit:risk profile of budesonide in the management of asthma and COPD.