Encephalopathy of prematurity (EoP) affects approximately 30% of infants born < 32 weeks gestation and is highly associated with inflammation in the foetus. Here we evaluated the efficacy of montelukast, a cysteinyl leukotriene receptor antagonist widely used to treat asthma in children, to ameliorate peripheral and central inflammation, and subsequent grey matter neuropathology and behaviour deficits in a mouse model of EoP. Male CD-1 mice were treated with intraperitoneal (i.p.) saline or interleukin-1beta (IL-1β, 40 μg/kg, 5 μL/g body weight) from postnatal day (P)1–5 ± concomitant montelukast (1–30 mg/kg). Saline or montelukast treatment was continued for a further 5 days post-injury. Assessment of systemic and central inflammation and short-term neuropathology was performed from 4 h following treatment through to P10. Behavioural testing, MRI and neuropathological assessments were made on a second cohort of animals from P36 to 54. Montelukast was found to attenuate both peripheral and central inflammation, reducing the expression of pro-inflammatory molecules (IL-1β, IL-6, TNF) in the brain. Inflammation induced a reduction in parvalbumin-positive interneuron density in the cortex, which was normalised with high-dose montelukast. The lowest effective dose, 3 mg/kg, was able to improve anxiety and spatial learning deficits in this model of inflammatory injury, and alterations in cortical mean diffusivity were not present in animals that received this dose of montelukast. Repurposed montelukast administered early after preterm birth may, therefore, improve grey matter development and outcome in EoP.