The efficacy of a 3-day course of dexamethasone (0.5 mg/kg/day) in 10 preterm infants (≤30 weeks gestation) with pulmonary interstitial emphysema (PIE) was studied in a retrospective case review. PIE was diagnosed at a median age of 7.5 days and treatment with dexamethasone began at 8.5 days. Seven of the 10 subjects had at least 2 days of conservative treatment (lowered mean airway pressure) preceding dexamethasone during which the mean airway pressure (MAP), oxygenation index (OI) and mechanical ventilation index (MVI) were not significantly different although within 3 days of dexamethasone each variable improved significantly (p < 0.05). Similarly, for all 10 infants, OI and MAP were significantly lower at 3 and 7 days from baseline (p < 0.005). By day 7, FiO2 (p = 0.022) and MVI (p = 0.011) were significantly lower and PIE had resolved on chest X-ray in 7/9 (78%) and improved in the remaining 2/9 (22%). Nine of the 10 infants survived to term. Three days of dexamethasone was associated with significant clinical improvement in most of these infants. The mechanism may relate to reduced airway oedema and inflammation and reduced airway obstruction.