Objective: To compare the beneficial clinical effect of nebulized budesonide to placebo in acute pediatric asthma. Design: Randomized controlled, double blinded trial with a parallel design. Setting: Emergency department (ED) of a tertiary care children's hospital. Patients: Children ≥ 6 months and < 18 years with a moderate to severe exacerbation of asthma (Pulmonary Index Score (PIS) ≥ 5 or ≤ 11 after a salbutamol nebulization of 0.15 mg/kg). All patients received prednisone 1 mg/kg orally and nebulized salbutamol (0.15 mg/kg) every 30 minutes for 3 doses and then every hour for 4 hours. Intervention: 2 mg (4 mls) of nebulized budesonide or 4 mls of nebulized normal saline. Main outcome measures: PIS and discharge rates from the ED. Results: Baseline characteristics were comparable in the budesonide group (N = 24) and in the placebo group (N = 20). At 1 hour, the PIS was lower in the budesonide group (median = 5) compared with those who had received placebo (median = 6; P = 0.07). Survival analysis of discharge from the hospital showed a faster rate in the budesonide group as compared with the placebo group (P = 0.02). By 6 hours, 67% of the budesonide patients had been discharged home as compared with 30% of the placebo patients (P = 0.02). Based on these results, 3 patients would need to be treated with nebulized budesonide in order for 1 patient to be discharged prior to 6 hours. Conclusion: Nebulized budesonide is a safe and effective adjunct to oral prednisone in the management of moderate to severe asthma exacerbations.