Glucocorticoids are often applied in neonatology and perinatology to fight the problems of respiratory distress and chronic lung disease. There are, however, many controversies regarding the adverse side effects and long-term clinical benefits of this therapeutic approach. In rats, glucocorticoids are known to seriously impair the formation of alveoli when applied during the first two postnatal weeks even at very low dosage. The current study investigates short-term and long-term glucocorticoid effects on the rat lung by means of morphologic and morphometric observations at light and electron microscopic levels. Application of a high-dosage protocol for only few days resulted in a marked acceleration of lung development with a precocious microvascular maturation resulting in single capillary network septa in the first 4 postnatal days. By postnatal d 10, the lung morphologic phenotype showed a step back in the maturational state, with an increased number of septa with double capillary layer, followed by an exceptional second round of the alveolarization process. As a result of this process, there was an almost complete recovery in the parenchymal lung structure by postnatal d 36, and by d 60, there were virtually no qualitative or quantitative differences between experimental and control rats. These findings indicate that both dosage and duration of glucocorticoid therapy in the early postnatal period are very critical with respect to lung development and maturation and that a careful therapeutic strategy can minimize late sequelae of treatment.