This paper discusses risk factors for pre-school-aged children developing and being hospitalised with community-acquired pneumonia in New Zealand, using data from a cohort of children aged <5 years old residing in urban Auckland between 2002 and 2004. To assess the risk of developing pneumonia, 289 children hospitalised with pneumonia plus 139 children with pneumonia discharged from the Emergency Department were compared with a random community sample of 351 children without pneumonia. To assess risk of hospitalisation, children hospitalised with pneumonia were compared with those discharged from the Emergency Department. After adjustment for season, age and ethnicity, the risk of pneumonia was higher in children with lower weight for height (OR 1.28), those spending less time outside (1.96), with previous chest infections (2.31) and having mould in the bedroom (1.93). The risk of pneumonia hospitalisation was more likely among children with a maternal history of pneumonia (4.03), living in a more crowded household (2.87) and one with cigarette smokers (1.99), and having mould in the bedroom (2.39).