Three children aged 11 mos. to 3 yrs. with LIP diagnosed by open lung biopsy had clinical and laboratory features of AIDS prodrome. No opportunistic organisms were isolated from the lungs or morphologically demonstrated. Two of the patients are black and one is blracial (black-Caucasian). One girl's father had AIDS and died of PTB and Pneumocystis pneumonitis. Her mother is on INH for PTB. The 2nd child's mother is mentally handicapped, sexually promiscuous, and alcoholic, and a possible drug abuser, while the father is unknown. The 3rd patient's mother has no risk factors but the father is a Vietnam war veteran who was treated for PTB. None received blood transfusion prior to presentation with recurrent respiratory infections, failure to thrive, persistent Candida infection, generalized lymphadenopathy and hepatosplenomegaly. Roentgenogram showed diffuse reticulonodular interstitial densities. All have pO2 < 80 mm.Hg in room air. Immunologic studies showed marked hyper-gainmaglobulinemia, depressed cellular immunity, inverted T-cell subset ratios, elevated circulating immune complexes, normal chemotaxis, depressed natural killer and bactericidal cell functions, positive HTLV3 serology and elevated alpha1 thymosin. None of the patients were treated with steroids. One receives gamma globulin. All three received antibiotics intermittently. All have been clinically stable during the 5–24 months of follow up. Steroids need not be given in children with LIP in AIDS prodrome.