Background Postnatal respiratory complications among term infants are common. The most commonly reported cause of neonatal respiratory distress is transient tachypnea of the newborn (TTN), with an estimated incidence of 0.5–2.8% of all newborns.Aim To evaluate and compare the efficacy and safety of inhaled salbutamol and intravenous (i.v.) furosemide in the treatment of TTN and to monitor of their possible adverse effects in neonates.Patients and methods This was a randomized controlled clinical trial on 100 neonates who were admitted immediately or shortly after birth owing to persistence of tachypnea to neonatal intensive care unit of pediatric hospitals, Cairo University, over a 1-year period. Our study included 100 neonates (25 in the salbutamol group, 25 in the furosemide group, and 50 in the control group) with TTN born between 35 and 39 weeks of gestational age. They were randomized in a blinded manner to receive one nebulized dose of salbutamol 0.15 mg/kg in 0.9% saline solution or i.v. furosemide 1 mg/kg once in addition to oxygen and i.v. fluids or received oxygen and i.v. fluids alone.Results The efficacy of inhaled salbutamol and furosemide was assessed by determining the respiratory rate, heart rate, TTN clinical score, and the level of respiratory support before receiving medication and 30 min, 1, and 4 h after drug therapy. The duration and level of respiratory support and the period of hospitalization were shorter in the salbutamol group. There was a significant decrease in the respiratory rate and TTN score in the salbutamol group 4 h after nebulized salbutamol.Conclusion Comparing the three groups after respiratory support, TTN score was significantly improved in the salbutamol group. The total duration of oxygen treatment in hours and total neonatal intensive care unit stay in days were significantly shorter in the salbutamol group than in furosemide and control groups. Regarding the safety of salbutamol, our study did not show a significant difference in adverse effects. Inhaled salbutamol treatment was effective in TTN without adverse events. Further studies at larger or repeated doses of furosemide may be needed.