Background & objective: Managing preoperative anxiety and ensuring cooperation in children undergoing surgery remains a key concern in pediatric anesthesia. Nebulized premedication offers a non-invasive method that may enhance comfort and compliance. This study aimed to compare the effects of nebulized dexmedetomidine and midazolam on sedation, anxiety reduction, cooperation, and recovery in pediatric patients scheduled for elective surgical procedures. Methodology: A randomized, double-blind clinical trial was conducted involving 100 children aged between 5 and 12 years with ASA physical status I or II. Participants were randomly assigned to receive either dexmedetomidine (2 mcg/kg) or midazolam (0.2 mg/kg) via nebulization, administered 20 minutes before induction. Sedation and anxiety were assessed before and after drug administration. Additional outcomes included acceptance of the nebulized medication and anesthesia mask, intraoperative hemodynamic trends, postoperative agitation, recovery duration, and any adverse effects. Results: Children in the dexmedetomidine group exhibited significantly deeper sedation and lower anxiety scores following nebulization (P < 0.001). While medication acceptance was similar in both groups, mask acceptance was better in the dexmedetomidine group (P < 0.001). Intraoperative monitoring showed more stable heart rate and blood pressure in children premedicated with dexmedetomidine. Emergence agitation was notably lower (10% vs. 34%, P = 0.002), and recovery was faster in the dexmedetomidine group (mean 22.4 +/- 4.3 minutes vs. 26.9 +/- 5.1 minutes, P = 0.003). No significant adverse events were reported. Conclusions: Nebulized dexmedetomidine is more effective than midazolam for pediatric premedication, providing better sedation, improved cooperation, hemodynamic stability, and quicker recovery. Its non-invasive route and favorable safety profile make it a promising choice for routine use in children undergoing elective surgeries.