Background & objectives: Children are more anxious and fearful due to their limited cognitive capabilities, lack of understanding of health care system and lack of self control. It becomes an important concern for an anaesthesiologist to relieve their pre-operative anxiety. Midazolam is frequently used as premedication agent in children. New drugs such as the alpha-2 agonists have also been introduced as alternatives for premedication in pediatric patients. The present study was planned to compare intranasal Dexmedetomidine with intranasal Midazolam as a preanaesthetic medication in children with the primary objectives of assessing preoperative sedation & ease of child parent separation and secondary objectives of assessing analgesia in the postoperative period. Materials and methods: Seventy children, aged between 2-6 years of either sex,belonging to ASA Grade I & II and weighing between 10-16kg were enrolled in this prospective,single blinded, randomized and comparative clinical study. The children were divided into two groups of 35 each. Forty five minutes before induction, Group-D(n=35)-received intranasal Dexmedetomidine 1mcg/kg and Group M(n=35) –received intranasal midazolam 0.3mg/kg. Results: Children who were premedicated with intranasal dexmedetomidine had lower sedation (MOAA/S Scale) scores (P<0.0001), and easier child-parent separation than children who received intranasal midazolam. Postoperatively, less number of patients required rescue analgesia in the dexmedetomidine group. Conclusion: Intranasal Dexmedetomidine can be used effectively and safely as a preanaesthetic medication in children undergoing minor surgical procedures under General anaesthesia.