The objective of this study was to evaluate the effectiveness and safety of nebulized pentoxifylline, when compared with systemic dexamethasone for prevention of bronchopulmonary dysplasia (BPD) in very low birth weight infants (VLBW). BPD is characterized by continuous oxygen requirement for at least 27 days and oxygen dependency in the 36th week of postmenstrual age. It is generally accepted that the pathogenesis of BPD mainly involves pulmonary inflammation. The postnatal use of systemic steroids is associated with neuromotor disability. Methods. One hundred and fifty VLBW infants were randomly assigned to three groups: PTX group, DX group and placebo group. Entry criteria were defined as a need of oxygen administration or ventilatory support on the fourth day of life. Data analysed. During the trial the following data was collected: birth weight, gestational age, sex, Apgar score, clinical risk index for babies (CRIB), the occurrence of congenital or nosocomial infection in the mother, Ureaplasma positive broncho-alveolar lavage (BAL), antenatal steroid administration. Plasma samples were obtained for determination of pro-inflammatory cytokines: TNFa, IL-8, IL-10, IL- 12 and plasma pentoxifylline and its metabolites concentrations. Results. Prophylaxis with pentoxifylline and dexamethasone reduced the incidence of BPD when compared with placebo. Conclusion. Nebulized pentoxifylline reduces the risk of BPD in VLBW group of infants and may be a potential alternative to steroids.