This randomized controlled trial was designed to answer the question: does administration of dexamethasone to neonates with bronchopulmonary dysplasia decrease the need for assisted ventilation? Twenty-five infants with a birth weight < 1501 g, requiring mechanical ventilation and FiO2 of > or = 0.30 at 21-35 days of age, were randomized to treatment with iv dexamethasone or to sham injections for 12 days. The primary outcome criterion was extubation within seven days after study entry. Treatment (n = 12) and control (n = 13) groups were well matched at entry. Dexamethasone facilitated weaning from assisted ventilation (p = 0.0154). There was no increased incidence of infection. Dexamethasone treatment resulted in a significant increase in glucosuria (p = 0.0002) and in systolic blood pressure (p = 0.0034). There was a significant decrease in heart rate (p = 0.0001) and a significant weight loss (p = 0.0002) following dexamethasone treatment. Dexamethasone treatment facilitated weaning from assisted ventilation but several systemic effects were noted that deserve further evaluation before dexamethasone becomes routine treatment.