Parapneumonic effusions in children with community-acquired pneumonia (CAP) often prolong the period of ill-health and may be associated with increased mortality. This study set out to determine the patterns, risk factors, aetiology, and outcome of parapneumonic effusions among children admitted with CAP at a tertiary health facility in south-west Nigeria. All cases of childhood pneumonia, including those with parapneumonic effusions, were retrospectively studied over a 3-year period by looking at hospital records. Relevant study variables were compared in the children with and without parapneumonic effusions. Multivariate regression analysis was used to determine the independent determinants of the presence of effusions among the children and the diagnostic accuracy of these determinants was assessed. The hospital incidence of parapneumonic effusions during the study period was 19 per 1000 admissions; with parapneumonic effusions seen in 8.0% of the cases of childhood pneumonia. The majority (85.7%) of these children were infants and Staphylococcus aureus was the predominate isolate from the pleural fluid. Infancy, late presentation, inadequate immunisation, pre-admission antibiotic use, signs of severe disease (grunting, head nodding, heart failure, and cyanosis) as well as concurrent measles infection, were significantly associated with parapneumonic effusions (p<0.05). Only late presentation independently predicts the presence of effusions (odds ratio (OR) = 3.821; 95% confidence interval (CI) = 1.614-6.925; p=0.007, area under the curve (AUC) = 0.635). Late presentation and delayed treatment of childhood CAP is an important risk factor for the development of parapneumonic effusions.