--Disease Characteristics-- Premature infants with evolving bronchopulmonary dysplasia on chest x-ray Requirement for mechanical ventilation Fraction of inspired oxygen greater than 0.30 Ventilator at least 15 cycles/minute No signs of weaning within 72 hours prior to entry No serious congenital anomaly --Prior/Concurrent Therapy-- No prior postnatal corticosteroids --Patient Characteristics-- Cardiovascular: No congenital heart disease Other: Birth weight no greater than 1500 g Gestational age no greater than 30 weeks No contraindication to corticosteroids, e.g., culture-proven bacterial sepsis