Chronic lung disease (CLD) remains an important cause of mortality and morbidity in preterm infants despite the administration of antenatal corticosteroids, surfactant replacement therapy and other advances in neonatal intensive care. There is increasing evidence from cellular and biochemical research that inflammation plays an important role in the pathogenesis of CLD. Thus, interventions aimed at reducing or modulating the inflammatory process may reduce the incidence or severity of CLD. Theoretically, the use of inhaled corticosteroids may allow for beneficial effects on the pulmonary system without concomitant high systemic concentrations and less risk of adverse effects. To compare the effectiveness of inhaled versus systemic corticosteroids, started within the first two weeks of life, in preventing CLD in ventilated very low birth weight infants. Randomized and quasi-randomized trials were identified by searching the Cochrane Controlled Trials Register (The Cochrane Library, Issue 3, 2002), MEDLINE (1966 - September 2002), EMBASE (1980 - September 2002), CINAHL (1982 - September 2002), reference lists of published trials and abstracts published in Pediatric Research (1990 - April 2002) from the Society of Pediatric Research/ Pediatric Academic Society's annual meetings. Randomized or quasi-randomized clinical trials comparing inhaled versus systemic corticosteroid therapy (regardless of the dose and duration of therapy), started in first two weeks of life in very low birth weight preterm infants receiving assisted ventilation. Data regarding clinical outcomes including CLD at 28 days or 36 weeks corrected gestational age (CGA), mortality, combined outcome of death or CLD at 28 days or 36 weeks CGA, other pulmonary outcomes and adverse effects were evaluated. All data were analyzed using RevMan 4.1. When appropriate, meta-analysis was performed using relative risk (RR), risk difference (RD), and weighted mean difference (WMD) along with their 95% confidence intervals (CI). If RD was significant, number needed to treat (NNT) or number needed to harm (NNH) was calculated. Two trials qualified for inclusion in this review. There was an increase in the incidence of CLD at 36 weeks CGA in the inhaled steroid group amongst all randomized infants, which was of borderline statistical significance: [RR 1.45 (95% CI 0.99, 2.11); RD 0.11 (95% CI 0.00, 0.21), p = 0.05, 1 trial and n = 278]. There was no statistically significant difference in the incidence of CLD at 36 weeks amongst all survivors [RR 1.34 (95% CI 0.94, 1.90); RD 0.11(95% CI -0.02, 0.24), 1 trial and n = 206]. There were no statistically significant differences for oxygen dependency at 28 days (2 trials and n = 294), death by 28 days (2 trials and n = 294) or 36 weeks (2 trials and n = 294) and the combined outcome of death or CLD by 28 days (2 trials and n = 294) or 36 weeks CGA (1 trial and n = 278). The duration of mechanical ventilation was statistically significantly longer in the inhaled as compared to the systemic steroid group (WMD 3.89 days, 95% CI 0.24, 7.55; 2 trials and n = 294). The duration of supplemental oxygen was statistically significantly longer in the inhaled as compared to the systemic steroid group (WMD 11.10 days, 95% CI 1.97, 20.22; 2 trials and n = 294). There was a significantly lower incidence of hyperglycemia in the group receiving inhaled steroids (RR 0.52, 95% CI 0.39,0.71; RD -0.25, 95% CI -0.37, -0.14; 1 trial and n = 278). The NNT was 4.0 (95% CI 2.7, 7.14) to avoid one infant experiencing hyperglycemia. There was a statistically significant increase in the rate of patent ductus arteriosus (RR 1.64, 95% CI 1.23, 2.17; RD 0.21, 95% CI 0.10, 0.33; 1 trial and n = 278) in the group receiving inhaled steroids. The NNH was 4.8, 95% CI 3, 10. There were decreases of borderline statistical significance in the incidences of gastrointestinal hemorrhage and gastrointestinal perforation in the inhaled as compared to systemic steroid group: for gastrointestinal hemorrhage, RR 0.40, 95% CI 0.16, 1.02; RD -0.06, 95% CI -0.12, 0.00, p = 0.05 (1 trial and n = 278); for gastrointestinal perforation, RR 0.16, 95% CI 0.02, 1.29; RD -0.04, 95% CI -0.07, 0.00, p = 0.05 (1 trial and n = 278). The incidence of other side effects was not statistically significantly different in the two groups. No information was available on long term neurodevelopmental outcomes. This review found no evidence that early inhaled steroids confer important advantages over systemic steroids in the management of ventilator dependent preterm infants. Neither inhaled steroids, nor systemic steroids, can be recommended as a part of standard practice for ventilated preterm infants. Because they might have fewer adverse effects than systemic steroids, further randomized controlled trials of inhaled steroids are needed which address risk/benefit ratio of different delivery techniques, dosing schedules and long term effects, with particular attention to neurodevelopmental outcome.