Evidence is accumulating that indoor dampness and mold are associated with the development of asthma. The underlying mechanisms remain unknown. New Zealand has high rates of both asthma and indoor mold and is ideally placed to investigate this. We conducted an incident case‐control study involving 150 children with new‐onset wheeze, aged between 1 and 7 years, each matched to two control children with no history of wheezing. Each participant’s home was assessed for moisture damage, condensation, and mold growth by researchers, an independent building assessor and parents. Repeated measures of temperature and humidity were made, and electrostatic dust cloths were used to collect airborne microbes. Cloths were analyzed using qPCR. Children were skin prick tested for aeroallergens to establish atopy. Strong positive associations were found between observations of visible mold and new‐onset wheezing in children (adjusted odds ratios ranged between 1.30 and 3.56; P ≤ .05). Visible mold and mold odor were consistently associated with new‐onset wheezing in a dose‐dependent manner.