Fifteen patients with pulmonary sarcoidosis, representing the functionally most severely affected quartile of referred patients, were prescribed steroids during one year. During this period and after 7 years on average, measurements were made of lung volumes, the static elastic pressure/volume (PstL/V) curve and lung resistance (RL). Lung mechanics and arterial blood gases were studied at exercise. Within months static compliance (CstL) and the arterial partial pressure of oxygen improved along with radiography. A modest positive trend continued throughout the follow-up. The vital capacity followed CstL changes closer than did the total lung capacity, which remained low. Though CstL improved, transpulmonary pressure at maximal inspiration increased and the upper part of the PstL/V curve became flatter. RL remained moderately increased. The course of the physiologic findings may be explained by fairly stable parenchymal and peribronchial fibrosis after cessation of active inflammation, and by regress of reflex inhibition of inspiration. Thus most subjects showed modest improvement during and after treatment. The initial study of lung function provided important prognostic information. The study does not allow conclusive evidence with respect to long term benefit of treatment, but encourages continued use of steroids under the guidance of function tests.