Inflammation is a key contributor to the pathogenesis of bronchopulmonary dysplasia (BPD) in preterm infants, and cortisol plays a central role in controlling inflammation. Insufficient cortisol limits the ability of the sick newborn to handle stress and inhibit pulmonary inflammation. Evidence of lower cortisol and lower response to adrenocorticotropic hormone in infants subsequently developing BPD led to studies of early low-dose hydrocortisone to prevent BPD. Based on four randomised clinical trials enrolling almost 1000 extremely preterm infants, prophylaxis of early adrenal insufficiency with low-dose hydrocortisone significantly decreased BPD and mortality, as well as medical treatment for a patent ductus arteriosus. An increase in late-onset sepsis reported in the most immature infants had no adverse effect on mortality or neurodevelopmental outcomes. There was no increase in gastrointestinal perforation in the absence of indomethacin. The demonstrated beneficial effects of early low-dose hydrocortisone make a strong case for its use in extremely preterm infants at high risk for BPD.