When cells are injured, they release products called phospholipids. There are enzymes called phospholipases which convert phospholipids to arachidonic acid. Arachidonic acid (AA) is the chemical mediator of inflammation in the body. AA goes through several different chemical reactions (called oxygenation) to produce several chemical mediators of inflammation (leukotrienes, prostaglandins, and thromboxane). These chemicals have many effects which include blood platelet aggregation, increased cell permeability (swelling), further recruitment of inflammatory chemicals (histamine, serotonin, bradykinin), and recruitment of cells called macrophages (these cells remove damaged tissue but their byproduct is scar tissue).

Corticosteroids are phospholipase inhibitors therefore phospholipids cannot be converted to AA, thus stopping inflammation at the beginning of the process. Corticosteroids have what is called a catabolic effect, meaning a breakdown effect, which is how they decrease scar tissue. The mechanism of this effect is unknown.