The purpose of this study was to evaluate the relationship between bronchoalveolar lavage (BAL) cytology, arterial blood gases and plasma lactate concentration during a standardised treadmill test (STT) in racehorses with small-airway inflammation (SAI), or exercise-induced pulmonary haemorrhage (EIPH). Sixteen Thoroughbred and 20 Standardbred actively racing racehorses, were divided into a control group (n = 10), EIPH group (n = 13) and SAI group (n = 13). Each STT consisted of a 2 min trot at 4 m/s followed by 5 x 1 min, incremental speed steps (6, 8, 10, 11 and 12 m/s) at 10% incline for Thoroughbred and 5% for Standardbred horses, followed by a 15 min recovery period. Blood was collected via a transverse facial artery catheter at the end of each step. Total nucleated cell count of bronchoalveolar lavage fluid (BALF) collected from horses with EIPH was significantly higher than controls. Neutrophil count and percentage in BALF collected pre-STT from horses with SAI were significantly higher than controls. Horses with EIPH or SAI exhibited a more severe exercise-induced arterial hypoxaemia than control horses during the first 4 steps of the STT (P < 0.001). Poorly performing horses were more severely hypercapnic than control horses during the STT recovery period (P < 0.05). Five and 15 min post exercise, horses with SAI and EIPH had higher blood lactate and lower blood bicarbonate concentrations than control horses (P < 0.05). The results of this study suggest that lung ventilation-perfusion mismatch may be more severe in horses with respiratory disease. BALF of horses with SAI and EIPH was characterised by neutrophilic and lymphocytic inflammation, respectively. Very few parameters were significantly different between groups of good and poor performers.