Objective: To investigate the outcome for children hospitalised with radiologically confirmed community-acquired pneumonia (CAP) Design: Controlled follow-up study. Setting: Community based in Newcastle upon Tyne, North Tyneside and Northumberland schools. Patients: 103 cases of radiologically confirmed CAP a median of 5.6 years (range 4.4-7.4) after admission to Newcastle General Hospital, matched for sex and school class to a mean of two controls (n=248). Interventions: A respiratory questionnaire, clinical examination and spirometry measurements. Main outcome measures: Multiple regression was used to describe associations between explanatory variables, including CAP, and outcome variables: forced expiratory volume in 1 s percent predicted (FEV1%), forced vital capacity percent predicted (FVC%), persistent cough, doctor diagnosis of asthma and abnormal chest shape. Results: Cases were 2.9 times more likely (95% CI 1.45 to 5.71, p=0.020) than controls to have persistent cough and 5.5 times more likely to have an abnormal chest shape ( 95% CI 1.65 to 18.28, p=0.005). Cases of an atopic parent had a 7.0% deficit in FEV1% predicted (95% CI 210.5 to 23.2, p < 0.001) and a 4.4% deficit in FVC% predicted (95% CI -8.0 to -0.78, p=0.017), but were not at increased risk of subsequent asthma. Cases of a non-atopic parent were at increased risk of subsequent asthma (OR 4.8, 95% CI 1.43 to 16.34, p=0.011) but not of deficit in lung function. Conclusions: CAP requiring admission to hospital is associated with deficits in lung function and persistent respiratory symptoms. This has implications for follow-up for which recommendations are currently lacking. Parental atopy may be a determinant of outcome.