Infantile hemangioma (IH) is the most common benign vascular neoplasm of infancy, occurring in 1.0–2.5% of white infants, especially girls. Steroids and propranolol are the most widely used drugs as a primary treatment for IH. Although their mechanism of action is not well understood, their beneficial effect is documented. Our purpose was to compare the clinical efficacy of propranolol alone and propranolol combined with steroids on the outcome of IH. A total of 450 children (median age: 9 months; range: 7 days to 3 years) were included in this randomized controlled study, being treated with combined steroid and propranolol (Group A: 230 children) compared to those treated with propranolol plus placebo (Group B: 220 children). The steroid was given as a loading dose of 2–3 mg/kg/day and then gradually tapered over 6 months, whereas propranolol was given as an incremental dose starting at 0.16 mg/kg/day and reaching a maximum of 2 mg/kg/day maintained for 18 months (duration of therapy). Frequent monitoring of the blood sugar level was mandatory in the first 2 months: electro- and echocardiograms were recorded initially but not repeated. A more rapid involution rate, recognized by color fading and flattening of the lesions, was noted in Group A compared to Group B, with the peak response reached after 10 months of therapy followed by a slower but steady rate of further improvement. No major adverse effects were observed in Group A with regard to hypoglycemia or hypotension. On the other hand, ten cases of vomiting and diarrhea, one case of fungal infection and twelve cases of somnolence and fatigue were observed in Group B. Steroid induction seems to cover the gap at initiation of therapy where propranolol cannot be given as a full dose, especially in neonates. Steroid combination minimizes the adverse effects of propranolol, namely, hypoglycemia, hypotension and bradycardia. Children treated with a combined regimen showed more effective clearing of lesions, were less likely to require surgery for residual lesions and had minimal adverse effects compared to the single-drug group. In both groups there was a faster clearing rate for the head and neck lesions than elsewhere in the body, which can be explained by the higher blood flow to this region, magnifying the level of medication to these lesions and achieving a better response.