Acute respiratory distress syndrome (ARDS) is an acute respiratory failure syndrome caused by non-cardiogenic pulmonary edema of various etiologies.[1](#ref-0001) When the fetus encounters asphyxia, acidosis, infection, meconium inhalation, et al. during childbirth, the inflammatory pathway will be activated. The systemic inflammatory response can remove pathogens, but the excessive inflammatory response will prompt pulmonary surfactant (PS) inactivation and increase the permeabilities of alveolar epithelial and endothelial cells, resulting in the accumulation of edema fluid in the alveoli and eventually leading to severe hypoxemia, respiratory distress and decreased lung compliance.[1,2](#ref-0001) Population-based studies in the United States, Australia, Europe, and New Zealand reported that the incidence of ARDS in children is 2.0-12.8 per 100000 person-years,[3](#ref-0003) and according to the interim report of the International Neonatal ARDS Multicenter Study, the mortality of neonatal ARDS (NARDS) is approximately 20%.[4](#ref-0004) Due to the high mortality of NARDS, the researchers try to explore potential new treatments to limit the incidence and mortality of NARDS. Systemic inflammatory response plays a significant role in the occurrence and development of NARDS, budesonide, a non-halogenated corticosteroid, has a potent local pulmonary anti-inflammatory effect, therefore, it may be an effective treatment option for NARDS. This article reviews the evolution of ARDS definition and diagnosis, pathophysiological mechanisms of NARDS, and gives an outlook on the application of budesonide in NARDS.