Despite the substantial burden of lung disease throughout childhood in children who were born very preterm, there are no evidence-based interventions to improve lung health beyond the neonatal period. We tested the hypothesis that inhaled corticosteroid improves lung function in this population. PICSI was a randomised, double-blind, placebo-controlled trial at Perth Children's Hospital (Perth, WA, Australia) to assess whether fluticasone propionate, an inhaled corticosteroid, improves lung function in children who had been born very preterm (<32 weeks of gestation). Eligible children were aged 6-12 years and did not have severe congenital abnormalities, cardiopulmonary defects, neurodevelopmental impairment, diabetes, or any glucocorticoid use within the preceding 3 months. Participants were randomly assigned (1:1) to receive 125 μg fluticasone propionate or placebo twice daily for 12 weeks. Participants were stratified for sex, age, bronchopulmonary dysplasia diagnosis, and recent respiratory symptoms using the biased-coin minimisation technique. The primary outcome was change in pre-bronchodilator forced expiratory volume in 1 s (FEV1) after 12 weeks of treatment. Data were analysed by intention-to-treat (ie, all participants who were randomly assigned and took at least the tolerance dose of the drug). All participants were included in the safety analyses. This trial is registered at the Australian and New Zealand Clinical Trials Registry, number 12618000781246. Between Oct 23, 2018, and Feb 4, 2022, 170 participants were randomly assigned and received at least the tolerance dose (83 received placebo and 87 received inhaled corticosteroid). 92 (54%) participants were male and 78 (46%) were female. 31 participants discontinued treatment before 12 weeks (14 in the placebo group and 17 in the inhaled corticosteroid group), mostly due to the impact of the COVID-19 pandemic. When analysed by intention-to-treat, the change in pre-bronchodilator FEV1 Z score over 12 weeks was -0·11 (95% CI -0·21 to 0·00) in the placebo group and 0·20 (0·11 to 0·30) in the inhaled corticosteroid group (imputed mean difference 0·30, 0·15-0·45). Three of 83 participants in the inhaled corticosteroid group had adverse events requiring treatment discontinuation (exacerbation of asthma-like symptoms). One of 87 participants in the placebo group had an adverse event requiring treatment discontinuation (inability to tolerate the treatment with dizziness, headaches, stomach pains, and worsening of a skin condition). As a group, children born very preterm have only modestly improved lung function when treated with inhaled corticosteroid for 12 weeks. Future studies should consider individual phenotypes of lung disease after preterm birth and other agents to improve management of prematurity-associated lung disease. Australian National Health and Medical Research Council, Telethon Kids Institute, and Curtin University.