Recurrent apnea is common in preterm infants with consequent episodes of loss of effective breathing and the bronchodilator theophylline prevents apnea and reduces the number of apneic attacks. This drug also reduces hypoxaemic episodes. Theophylline acts on the lungs, kidneys and brain. Theophylline inhibits solute reabsorption in various segments of the nephron and a marked diuresis which occurs immediately after the administration of theophylline. This drug ameliorates kidney dysfunction and prophylaxis given early after birth, preventing vasomotor nephropathy. Theophylline reduces brain activity and reduces the spontaneous activity transients and alters the sleep-wake state in pre-term infants. Theophylline is extensively metabolized in premature infants and its major metabolic product is caffeine. The demethylation pathway occurring predominantly in adults is substituted by N-methylation to caffeine in premature infants. The halflife of theophylline is 5-fold longer in neonates than in adults and reaches the adult value at the age of 55 weeks. Theophylline may be administered trans-cutaneously by applying this drug to the back or abdomen of the infants and the mean fractional absorbance at 30 hours is 0.25. Theophylline is present in saliva and the concentration of this drug in saliva is similar to that in plasma, saliva may be used to monitor theophylline concentration. In conclusion, theophylline is a useful drug to treat apnea and ameliorate kidney dysfunction.