Hydrocortisone (HC) despite a low aqueous solubility and a very poor palatability is frequently used unlicensed in paediatric practice. Hence a reconstitutable taste masked hydrocortisone solution with the potential to be easily produced extemporaneously was developed. Excipients for the reconstitutable dry powder mix were selected based on their aqueous solubility, compatibility, safety profile in children and stability at the optimum pH for HC. Formulations were visually inspected and pH was checked. The chemical and microbiological stability was assessed by a validated HPLC method and the European Pharmacopeia tests. A taste assessment study was performed on 20 young healthy adults to determine the optimum sweetener. HC was flavored (orange tangerine), preserved (methyl paraben sodium salt/potassium sorbate), adjusted to pH 4.2 (citric acid buffer) and included in a 1:6 hydroxypropyl-β-cyclodextrin (HP-β-CyD) complex which allowed complete solubilization of the drug following reconstitution within 1 min of handshake. Neotame 0.075% was found to be the sweetener of choice to mask the unpalatable taste and aftertaste of HC. All formulations tested at different storage conditions were found to be chemically stable after reconstitution with a HC recovery of >95% for 1 month. Microbiological assessment showed that the selected preservative combination was efficient and the presence of preservative ensured the recommended acceptance criteria for microbiological quality after reconstitution with repetitive sampling. The successfully developed 5 mg/mL reconstituted oral palatable paediatric HC solution was stable for 1 month after reconstitution and has the potential to facilitate dosing, acceptability, availability and affordability.