The aim of this study was done to determine whether dexamethasone treatment prevents posthemorrhagic hydrocephalus (PHH) development and attenuates brain damage after severe IVH in newborn rats. Severe IVH was induced by injecting: 100 muL of blood into each lateral ventricle of postnatal day 4 (P4) Sprague-Dawley rats. Dexamethasone was injected intraperitoneally into rat pups at a dose of 0.5 mg/kg, 0.3 mg/kg, and 0.1 mg/kg on P5, P6, and P7, respectively. Serial brain magnetic resonance imaging and behavioral function tests, such as the negative geotaxis test and the rotarod test, were performed. On P32, brain tissues were obtained for histological and biochemical analyses. Dexamethasone treatment significantly improved the severe IVH-induced increase in the terminal deoxynucleotidyl transferase-mediated deoxyuridine triphosphate nick end-labeling-positive cells, glial fibrillary acidic protein-positive astrocytes and ED-1 positive microglia, and the decrease in myelin basic protein. IVH reduced a survival of 71%, that showed a tendency to improve to 86% with dexamethasone treatment, although the result was not statistically significant. However, dexamethasone failed to prevent the progression to PHH and did not significantly improve impaired behavioral tests. Similarly, dexamethasone did not decrease the level of inflammatory cytokines such as interleukin (IL) -1alpha and ss, IL-6, and tumor necrosis factor-alpha after severe IVH. Despite its some neuroprotective effects, dexamethasone failed to improve the progress of PHH and impaired behavioral tests after severe IVH.