To determine whether early (less than or equal to 12 hours) postnatal dexamethasone therapy would facilitate removal of the endotracheal tube and improve outcome in premature infants with severe respiratory distress syndrome, we conducted a double-blind, controlled study of 57 infants whose birth weights were less than 2000 gm. The placebo (n = 29) and treated (n = 28) groups were comparable in birth weight (mean +/- SD: 1273 +/- 323 vs 1318 +/- 359 gm), gestational age (30.1 +/- 2.1 vs 30.8 +/- 2.7 weeks), postnatal age (8.7 +/- 3.1 vs 8.5 +/- 3.1 hours), and pulmonary function at the start of the study. The dose of dexamethasone was 1.0 mg/kg/day for 3 days and then was progressively decreased for 12 days. Infants in the dexamethasone group had significantly higher pulmonary compliance, tidal volume, and minute ventilation, and required lower mean airway pressure for ventilation than infants in the placebo group. The endotracheal tube was successfully removed from more infants in the dexamethasone group (16/28 vs 8/29; p less than 0.025). Nineteen infants (65%) in the placebo group and 11 (39%) in the dexamethasone group (p less than 0.05) had lung injuries. Dexamethasone therapy was associated with a temporary increase in blood pressure and plasma glucose concentration and a delay in somatic growth. We conclude that early postnatal dexamethasone therapy improves pulmonary status, facilitates removal of the endotracheal tube, and minimizes lung injuries in premature infants with severe respiratory distress syndrome.