RATIONALE: The natural history of recovery from Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV2) remains unknown. Since fibrosis with persistent physiological deficit is a previously-described feature of patients recovering from similar coronaviruses, treatment represents an early opportunity to modify the disease course, potentially preventing irreversible impairment. OBJECTIVES: Determine the incidence of and describe the progression of persistent inflammatory interstitial lung disease (ILD) following SARS-CoV2 when treated with prednisolone. METHODS: A structured assessment protocol screened for sequelae of SARS-CoV2 pneumonitis. 837 patients were assessed by telephone four weeks after discharge. Those with ongoing symptoms had outpatient assessment at six weeks. Thirty patients diagnosed with persistent interstitial lung changes at multi-disciplinary team meeting were reviewed in the interstitial lung disease service and offered treatment. These patients had persistent, non-improving symptoms. RESULTS: At four weeks post-discharge, 39% of patients reported ongoing symptoms (325/837), and were assessed. Interstitial lung disease, predominantly organising pneumonia, with significant functional deficit was observed in 35/837 survivors (4.8%). Thirty of these patients received steroid treatment, resulting in a mean relative increase in transfer factor following treatment of 31.6% (standard deviation ± 27.64, p <0.001), and FVC of 9.6% (standard deviation ± 13.01, p = 0.014), with significant symptomatic and radiological improvement. CONCLUSION: Following SARS-CoV-2 pneumonitis, a cohort of patients are left with both radiological inflammatory lung disease and persistent physiological and functional deficit. Early treatment with corticosteroids was well tolerated and associated with rapid and significant improvement. This preliminary data should inform further study into the natural history and potential treatment for patients with persistent inflammatory ILD following SARS-CoV2 infection.