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Aims: To determine whether nebulised budesonide improves the symptoms or shortens the duration of stay of children admitted to hospital with a clinical diagnosis of croup., Methods: A prospective, randomised, double blind placebo controlled trial. Patients received either nebulised budesonide or placebo every 12 hours. The main outcome measures were duration of inpatient stay and croup scores at 30 minutes, one, two, four, 12, and 24 hours., Results: 87 patients (89 admissions) aged 7-116 months entered the trial. Nebulised budesonide was associated with a significant improvement in symptoms at 12 hours (95% confidence interval (CI) 1 to 3) and 24 hours (95% CI 0 to 3). Patients with an initial croup score above 3 demonstrated a significant improvement in symptoms at two hours (95% CI 1 to 3). Nebulised budesonide was also associated with a 33% reduction in the length of stay (95% CI 2% to 63%) when the confounding variables of age, initial croup score, and coryzal symptoms were taken into consideration., Conclusions: Nebulised budesonide is an effective treatment for children admitted to hospital with a clinical diagnosis of croup.