This paper is concerned with the development and application of a stochastic model for daily sulphur dioxide $(SO_2)$ concentrations in urban area (Seoul). For this, the characteristics of the regression trend, periodicity and dependence of the daily $SO_2$ concentration are investigated by a statistisical analysis of the daily average $SO_2$ values measured in Seoul area during 1989 $sim$ 1990. Based on these, nonlinear regression time series model for the prediction of daily $SO_2$ concentrations is derived. A statistical procedure for using the model to predict the concentration level is also proposed.