Some studies have shown a beneficial effect of corticosteroids in patients with community-acquired pneumonia (CAP), possibly by diminishing local and systemic antiinflammatory host response. To assess the efficacy of adjunctive prednisolone treatment in patients hospitalized with CAP. Hospitalized patients, clinically and radiologically diagnosed with CAP using standard clinical and radiological criteria, were randomized to receive 40 mg prednisolone for 7 days or placebo, along with antibiotics. Primary outcome was clinical cure at Day 7. Secondary outcomes were clinical cure at Day 30, length of stay, time to clinical stability, defervescence, and C-reactive protein. Disease severity was scored using CURB-65 (a severity index for community-acquired pneumonia evaluating Confusion, blood Urea nitrogen, Respiratory rate, Blood pressure, and age 65 or older) and Pneumonia Severity Index. We enrolled 213 patients. Fifty-four (25.4%) patients had a CURB-65 score greater than 2, and 93 (43.7%) patients were in Pneumonia Severity Index class IV-V. Clinical cure at Days 7 and 30 was 84/104 (80.8%) and 69/104 (66.3%) in the prednisolone group and 93/109 (85.3%) and 84/109 (77.1%) in the placebo group (P = 0.38 and P = 0.08). Patients on prednisolone had faster defervescence and faster decline in serum C-reactive protein levels compared with placebo. Subanalysis of patients with severe pneumonia did not show differences in clinical outcome. Late failure (>72 h after admittance) was more common in the prednisolone group (20 patients, 19.2%) than in the placebo group (10 patients, 6.4%; P = 0.04). Adverse events were few and not different between the two groups. Prednisolone (at 40 mg) once daily for a week does not improve outcome in hospitalized patients with CAP. A benefit in more severely ill patients cannot be excluded. Because of its association with increased late failure and lack of efficacy prednisolone should not be recommended as routine adjunctive treatment in CAP.