Abstract Screening CT identifies small peripheral lung nodules, some of which may be pre- or early invasive neoplasia. Secondary end point analysis of a previous chemoprevention trial in individuals with bronchial dysplasia showed reduction in size of peripheral nodules by inhaled budesonide. We performed a randomized, double-blind, placebo-controlled phase IIb trial of inhaled budesonide in current and former smokers with CT-detected lung nodules that were persistent for at least 1 year. A total of 202 individuals received inhaled budesonide, 800 μg twice daily or placebo for 1 year. The primary endpoint was the effect of treatment on target nodule size in a per person analysis after 1 year. The per person analysis showed no significant difference between the budesonide and placebo arms (response rate 2% and 1%, respectively). Although the per lesion analysis revealed a significant effect of budesonide on regression of existing target nodules (P = 0.02), the appearance of new lesions was similar in both groups and thus the significance was lost in the analysis of all lesions. The evaluation by nodule type revealed a nonsignificant trend toward regression of nonsolid and partially solid lesions after budesonide treatment. Budesonide was well tolerated, with no unexpected side effects identified. Treatment with inhaled budesonide for 1 year did not significantly affect peripheral lung nodule size. There was a trend toward regression of nonsolid and partially solid nodules after budesonide treatment. Because a subset of these nodules is more likely to represent precursors of adenocarcinoma, additional follow-up is needed. Cancer Prev Res; 4(1); 34–42. ©2010 AACR.