Interleukin-10 (IL-10), an anti-inflammatory cytokine, may have therapeutic potential in the fetal inflammatory response syndrome and its sequelae such as bronchopulmonary dysplasia (BPD). Our aim was to compare the effects of IL-10 versus dexamethasone (DEX) on important PMN functions of the newborn. PMNs were isolated into culture medium from cord blood after elective cesarean section deliveries. IL-10 and DEX were compared on an equimolar basis corresponding to previously measured plasma levels of DEX from infants treated for BPD. The endotoxin (LPS)-stimulated release of the pro-inflammatory cytokines, tumor necrosis factor (TNFα) and IL-1β, were markedly inhibited equally by IL-10 and DEX; the anti-inflammatory cytokine IL-4 was not released and IL-1 receptor antagonist (IL-1ra) was released less with DEX compared to IL-10. PMNs exposed to LPS, N-formyl-L-methionyl-L-leucyl-L-phenylalanine (fMLP), or S. aureus did not show a significant difference between control, DEX and IL-10 for apoptosis, respiratory burst, phagocytosis or killing respectively. Chemotaxis to fMLP or IL-8 was unaffected by DEX or IL-10. The principal effects of both IL-10 and DEX, on the PMN functions studied, are related to the control of pro- and anti-inflammatory cytokine release.