Glucocorticoids are widely used in perinatology, since they decrease the incidence of respiratory distress syndrome and chronic lung disease. However, evidence is now increasing that their use in this age group may result in impaired alveolar lung growth and general development. The aim of this study was to determine whether a low dose of hydrocortisone (1 mg/kg/day for 11 days) was deleterious to lung growth in rat pups, as compared to an equivalent dose of dexamethasone. While both dexamethasone and hydrocortisone increased alveolar diameter with thinning of the interairspace walls, only dexamethasone reduced the overall internal surface area of the lung available for respiratory exchange. Changes were more marked with dexamethasone as compared to hydrocortisone, which did not appear to affect alveolar septation. In conclusion, a prolonged course of low‐dose hydrocortisone may be deleterious for alveolar lung growth in rat pups, but the changes are less marked than those caused by dexamethasone. Pediatr Pulmonol. 2002; 33:443–448. © 2002 Wiley‐Liss, Inc.