BACKGROUND: Chronic lung disease (CLD) remains a major problem in neonatal intensive care units. Persistent inflammation in the lungs is the most likely underlying pathogenesis. Corticosteroids have been used to either prevent or treat CLD because of their potent anti-inflammatory effects. OBJECTIVES: To determine if postnatal corticosteroid treatment is of benefit in the prevention of chronic lung disease (CLD) in the preterm infant. This review examines the outcome of trials where preterm infants at risk of CLD were given postnatal steroids within 96 hours after birth. SEARCH STRATEGY: Randomised controlled trials of postnatal corticosteroid therapy were sought from the Oxford Database of Perinatal Trials, the Cochrane Controlled Trials Register, Medline, hand searching paediatric and perinatal journals, examining previous review articles and information received from practising neonatologists. SELECTION CRITERIA: Randomised controlled trials of postnatal corticosteroid treatment within 96 hours of birth (early) in high risk preterm infants were selected for this review. DATA COLLECTION AND ANALYSIS: Data regarding clinical outcomes including mortality, failure to extubate, pulmonary air leak, survival without chronic lung disease, CLD defined at 28 days postnatal age and 36 weeks post menstrual age, patent ductus arteriosus (PDA), severe intraventricular haemorrhage (IVH), periventricular leucomalacia (PVL), infection, hyperglycaemia, hypertension, severe retinopathy of prematurity (ROP), necrotising enterocolitis (NEC), gastrointestinal bleeding, intestinal perforation and long-term outcomes were abstracted and analysed using RevMan 4.1. MAIN RESULTS: Nineteen randomised controlled trials of early postnatal corticosteroid treatment of preterm babies at risk of developing CLD were identified. A meta-analysis of these trials demonstrates benefits as regards earlier extubation, decreased risks of CLD at both 28 days and 36 weeks, death or CLD at 28 days, PDA and pulmonary air leak. There were no differences in the rates of neonatal mortality, infection, severe ROP, severe IVH, PVL, NEC and pulmonary haemorrhage. Gastrointestinal bleeding and intestinal perforation were important adverse effects and the risks of hyperglycaemia and hypertension were also increased. In the two trials which have reported late outcomes, several adverse neurological effects were found at follow-up examinations of survivors treated with early steroids: abnormal neurological examination, cerebral palsy and developmental delay. REVIEWER'S CONCLUSIONS: The benefits of early postnatal corticosteroid treatment (< 96 hours) may not outweigh the known or potential adverse effects of this treatment. Adverse gastrointestinal effects early in the neonatal period and adverse neurological outcomes seen at follow-up mean that current use of early postnatal steroids needs to be reconsidered. There is a compelling need for the long term follow-up and reporting of late outcomes, especially neurological and developmental outcomes, among surviving infants who participated in all randomised trials of early postnatal corticosteroid treatment. The role of inhaled steroids remains to be elucidated.