The aim of this prospective, randomised, double blind study was to evaluate whether nebulised local steroid treatment is effective in the treatment of croup. Thirty six infants and children (0.4-4.9 years of age) admitted to hospital with moderate to severe croup were allocated to receive either 2 mg nebulised budesonide (20 children) or saline (16 children). Disease severity was assessed by a clinical total croup score based on stridor, cough, retractions, dyspnoea, and cyanosis. In addition the overall clinical impression was evaluated (0-100). Two hours after treatment there was a significant improvement in the total croup score in the group treated with budesonide (8 to 4.5), but not in the group treated with saline (8 to 8). Furthermore, the overall clinical impression assessment score decreased significantly (50 to 25) in the group treated with budesonide, whereas it remained constant in the placebo group (60 to 62). The total croup score and overall clinical severity were significantly better in the group treated with budesonide than in the placebo group. No side effects were observed. The results indicate that nebulised budesonide can be used as a safe and effective alternative treatment in children and infants with moderate to severe croup.