The effect of corticosteroid treatment on the course of farmer's lung (FL) was studied in 36 patients randomly allocated in a double-blind placebo-controlled study. All patients were in the acute stage of the disease and had had the first diagnosed attack of FL. Twenty patients were given prednisolone treatment for 8 wk. Sixteen patients received an 8-wk placebo treatment. One patient was withdrawn from the analysis when she terminated corticosteroid treatment because of side effects. After 1 month of treatment there was a significant difference (p = 0.03) in DLCO between the treatment groups. After a follow-up of 5 yr no statistically significant differences were found between the treatment groups in FVC, FEV1, or DLCO. FL recurred in six patients during the follow-up in the corticosteroid group and in one patient in the placebo group, but the difference was not statistically significant. In conclusion, in the corticosteroid group the improvement of pulmonary function was more rapid than in the placebo group, but no influence on the long-term result was found. The possibility that corticosteroid treatment may favor the occurrence of recurrent attacks of FL needs attention.