Pulmonary inflammation plays an important role in the development of chronic lung disease (CLD) in preterm infants. This inflammation occurs very early in postnatal life. Any therapy that could be beneficial in preventing CLD should be started very early. The investigators' previous double-blind study has shown that early (< 12 hours) postnatal use of intravenous dexamethasone for 4 weeks significantly suppressed pulmonary inflammation and significantly reduced the incidence of CLD. However, the use of dexamethasone was associated with increased incidence of infection and sepsis. Their follow-up study also suggested an increase in the incidence of psychomotor anomalies. As compared to intravenous administration, endotracheal instillation will provide more local anti-inflammatory effects and less systemic side effects. Infants will be eligible for the study if their birth weight (BW) is < 1500 gm and if they had severe respiratory distress syndrome (RDS) requiring mechanical ventilation shortly after birth. After informed consent is obtained, the infant will be randomly assigned depending on the condition of the infant. The primary outcome is the change in cytokines (interleukin-6, 8, 10 and TNF-α) levels in BAL fluid. Chronic lung disease (CLD) was judged at 36 postmenstrual weeks. Infants in the study group (S/B group) received surfactant (Survanta®, Abbott Laboratories, North Chicago, IL; 100 mg or 4 mL/kg/dose) and Budesonide (Pulmicort®, AstraZeneca Pty Ltd., Australia; 0.5 mg or 1mL/kg/dose), while those in the control group (S group) received surfactant (Survanta® Abbott, 100 mg/kg/dose) and saline (1mL/kg).