We have performed a randomized controlled study in 60 children (ASA 1.8 month to 10 yrs) undergoing lower abdominal and genitourinary surgery, to assess the effects of caudal anaesthesia on plasma cortisol and prolactin concentrations during early postoperative period. After induction of anaesthesia by inhalation or intravenously, thirty children received a standardized general anaesthetic (control group) while the remaining children received caudal anaesthetics with 0.25 % bupivacaine in addition to a similar general anaesthetic (caudal group). Blood samples for cortisol and prolactin were taken after induction and 1 hour after surgery. Postoperative analgesia was assessed by modified pain objective scale and side effects were noted. Children in the caudal group had significantly smaller plasma cortisol and prolactin concentrations at 1 hr postoperatively, compared with those in the control group. Plasma cortisol concentration after induction was higher than after one hour of surgery in the caudal group. These results were correlated with pain scores. No serious side effects were recorded. In conclusion, caudal anaesthesia attenuated the postoperative cortisol and prolactin responses to surgery and pain in children.