Fifty four patients of idiopathic pulmonary fibrosis were evaluated retrospectively to see the effect of prednisolone therapy on the course of the disease. The diagnosis was established based on clinical history, physical findings, radiology, HRCT, spirometry and transbronchial biopsy whenever possible. Each patient received prednisolone 1 mg/kg/day for 6 weeks which was then tapered gradually till a maintenance dose was achieved. Six patients (11.1%) died within 3 months (3 within 1 month) of presentation because of rapid progression of the disease and inspite of addition of intravenous methyl prednisolone. Improvement in symptomatology, particularly cough and dyspnoea, were quite variable. Twenty six (48.1%) reported subjective improvement by 20-80% of the initial symptoms. However, in most cases this improvement was for the initial 3-6 months of therapy. Subsequently either they deteriorated or remained stable. There was no clinical improvement in the remaining 20 patients (improvement in symptoms by 0 to less than 20%). There was no radiological improvement in any case. FVC improved at 3 months only after treatment compared to the baseline values (p < 0.01). However, subsequently there was no significant improvement in the lung function. Of the 37 cases whose initial FVC value could be obtained, 8 patients (21.6%) showed an improvement by more than 20% of their baseline values during their follow up period. Of these, 4 had the improvement by 3 months; 3 by 6 months; and one showed improvement at 1 year and 6 months. Five patients (13.5%) had a decrease in FVC by 10% or more during their follow up. One patient developed sputum positive pulmonary tuberculosis nine months after steroid therapy.