Many studies of steroids for middle ear effusion (MEE) have been reported but, due to small sample size or limitations in study design, none have adequately answered the question of their efficacy, and steroids remain an unproven option for practitioners prior to recommending surgical removal of the MEE. By means of a well designed large-scale trial, we hope to clarify whether steroids are efficacious for this common condition. By determining the subjects' allergy and immune status and by studying the inflammatory mediators present in the MEE of unsuccessfully treated subjects, we also hope to clarify the mechanisms of action of steroids in chronic OME. The aim of this trial is to determine the efficacy of a short course of an adrenocorticosteroid agent given with amoxicillin as compared to that of amoxicillin alone for the treatment of chronic MEE of at least two months' duration. Children 1 to 9 years of age with MEE of at least two months' duration will be randomly assigned to one of four treatment arms: 1) amoxicillin+prednisolone x 14 days, then amoxicillin for 14 more days, 2) amoxicillin+prednisolone x 14 days, then placebo (for amoxicillin) x 14 days, 3) amoxicillin+placebo (for prednisolone x 14 days, then amoxicillin for 14 more days, or 4) amoxicillin+placebo (for prednisolone) x 14 days, then placebo (for amoxicillin) x 14 days. All subjects with no MEE at the Day 28 visit will return at Day 60 for pneumatic otoscopy and tympanometry to ascertain recurrence rates. Likewise, those with no MEE at Day 60 will return at Day 90, and those still effusion-free will return at Day 120. Blood for immunoglobulin isotypes will be obtained at entry and allergy skin testing will be performed once during the study. Outcome measures will be the proportion of subjects without effusion at two and four weeks. The number of subjects with recurrence if MEE by the Day 120 visit will be examined. Complications and sequelae of treatment, especially the number and severity of intercurrent infectious diseases, will also be recorded for the treatment groups. We estimate that 47 subjects need to be entered in each treatment arm (a total of 188 subjects) to have 90 percent power of detecting an absolute benefit of at least 0.20 in the proportion effusion-free at two weeks for the steroid-treated groups.