The discovery could lead to new treatments for the conditions which affects one million children in Britain.
Scientists in America found the gene called DEBNND1B sets off a chain reaction that causes the immune system to overreact to irritants, triggering symptoms such as difficulty breathing and wheezing.
The findings are published online by the New England Journal of Medicine.
Only on other gene has been found that increases the chances of developing asthma.
Lead author Dr Hakon Hakonarson, director of the Center for Applied Genomics at The Children's Hospital of Philadelphia, compared the genes of 793 children with persistent asthma to those to 1,988 children without to discover those with the disease had a variation in their genetic code.
Dr Hakonarson said: "We now know that the DENND1B gene and its protein are involved in the release of cytokines, which are signalling molecules that in this case tell the body how it should respond to foreign particles.
"Many of these particles are well-known triggers of asthma. In asthma, patients have an inappropriate immune response in which they develop airway inflammation and overreaction of the airway muscle cells, referred to as airway hyperresponsiveness.
"The gene mutations in DENND1B appear to lead to overproduction of cytokines that subsequently drive this oversensitive response in asthma patients."
He added: "Because this gene seems to regulate many different cytokines, intervening in this pathway has great potential for treating asthma.
"Other asthma-related genes remain to be discovered, but finding a way to target this common gene variant could benefit large numbers of children if researchers can develop drugs to contain this signalling pathway. ."
Leanne Metcalf, Director of Research at Asthma UK, said: "A person’s likelihood of developing asthma is a combination of their genetic make-up and the kind of environment they are exposed to, especially in early life.
"This large scale and well designed study has shed more light on the link between genetics and the overreaction of the immune system which is responsible for asthma symptoms, and opens up an exciting potential avenue for new treatments for the 1.1m children in the UK with asthma.
"It is essential to remember, however, that genetics forms only one part of a much bigger picture, so further research is needed to understand exactly how genetic and environmental factors influence asthma."
Great progress by Prof Hakon Hakonarson - can see great potential for therapies by targeting this gene directly.