Dexamethasone is often given to intubated neonates to facilitate successful extubation. To study the effects of dexamethasone on pulmonary function immediately following extubation, we conducted a randomized, blinded, placebo-controlled trial in 51 infants. All infants had been intubated for a minimum of 3 days but no more than 30 days. Mean weight at extubation was 2.41 kg in treated infants, 2.25 kg in control infants. When infants were deemed ready for extubation, dexamethasone 0.5 mg/kg/dose or an equal volume of normal saline was given in three doses 8 hours apart. The final dose was given 1 hour before extubation. Esophageal pressure, air flow integrated to tidal volume (Vt), respiratory rate, and heart rate were measured before extubation, immediately following extubation, and every 20 minutes for 80 minutes. Total pulmonary resistance (RTP), dynamic lung compliance (CL), and minute ventilation (VE) were calculated. Forty-two infants completed the study; 19 infants received dexamethasone and 23 received placebo. There was no difference between the two groups in gestational age, weight at study, or length of intubation. Vt, RTP, VE, and CL were not significantly different between the two groups over time; however, RTP increased over time in the placebo group. Heart rate was significantly lower in the dexamethasone group. We conclude that dexamethasone appears to have limited effect on pulmonary function immediately following extubation in the population studied. Further studies should evaluate the drug effect beginning at least 1 hour after extubation.