Background Parapneumonic effusion (PPE) occurs as a complication in around 13% of instances of community-acquired pneumonia. Aim To assess the effect of dexamethasone as an adjunctive therapy in the treatment of PPEs in children. Patients and methods This is a double-blinded, parallel-group, placebo-controlled, randomized clinical trial carried out on 60 children aged from 1 to 13 years with pneumonia complicated by PPEs. Patients were randomly divided into two equal groups (with the usual treatment in the form of double antibiotics given to all) and either intravenous dexamethasone at a dose of 0.25 mg/kg every 12 h for 3 days (group A) or intravenous saline every 12 h for 3 days as placebo (group B). Results Duration of hospitalization, chest tube insertion, and number of patients referred to the pediatric intensive care unit were significantly lower in group A than in group B (P=0.007, P<0.001 and P=0.025, respectively). Normal PPE was significantly higher in group A than in group B (P=0.025) after 2 weeks, and small PPEs were significantly higher in group A than group B (P=0.008) on the 7th day. Fluid thickness by chest ultrasound on the 7th day was significantly lower in group A than in group B (P=0.016). Conclusion Dexamethasone was an effective adjunctive therapy for PPEs in children.