A study was done to evaluate the effectiveness of play therapy on level of anxiety among children undergoing nebulization in selected hospitals, Salem. Quasi experimental post test only control group design was adopted where purposive sampling technique was used to select the 30 children between 1-5 years of age from Sri Gokulam hospital (experimental group) and SKS hospital (control group), Salem. Play therapy was provided to the experimental group before and during the nebulization and in the control group no distraction was implemented. Post test level of anxiety was assessed in both groups with the help of Modified Spence Children Anxiety Scale. Data was collected from 29-07-2013 to 27-08-2013. Data was analyzed by using descriptive and inferential statistics. During post test on experimental group, 11(36.7%) children had no anxiety and 19(63.3%) had mild anxiety whereas in control group 25(83.3%) children had moderate anxiety and 5(16.7%) had severe anxiety. In experimental group, the post test mean percentage was 27.5% and in control group the mean percentage was 58.4% revealing a difference of 30.9%. Significant difference was found in the post test mean values of level of anxiety (t=16.5) at p<0.001 in experimental group. In experimental group there was no association of anxiety with the demographic variables whereas in control group there was an association of anxiety with education of care giver and previous exposure to hospital at p < 0.05 level. This study implies that play therapy was an effective intervention in reducing the level of anxiety among children undergoing nebulization therapy