A novel and improved aqueous nasal spray composition comprising a combination of corticosteroids and antihistaminic agents is provided. The composition is characterized by containing chitosan and/or polycarbophil as a bio-adhesive or mucoadhesive agent. The invention also provides a method of alleviating or treating a corticosteroid or antihistaminic agent responsive condition or disease by topically administering said aqueous nasal spray composition to the nasal cavity.