Acute lower respiratory infections (ALRI) are the main cause of death in young children worldwide. We report here the results of a study to determine the long-term survival of children admitted to hospital with severe pneumonia. The study was conducted on 190 Gambian children admitted to hospital in 1992-94 for ALRI who survived to discharge. Of these, 83 children were hypoxaemic and were treated with oxygen, and 107 were not. On follow-up in 1996-97, 62% were traced. Of the children with hypoxaemia, 8 had died, compared with 4 of those without. The mortality rates were 4.8 and, 2.2 deaths per 100 child-years of follow-up for hypoxaemic and non-hypoxaemic children, respectively (P = 0.2). Mortality was higher for children who had been malnourished (Z-score < -2) when seen in hospital (rate ratio = 3.2; 95% confidence interval (CI) = 1.03-10.29; P = 0.045). Children with younger siblings experienced less frequent subsequent respiratory infections (rate ratio for further hospitalization with respiratory illness = 0.15; 95% CI = 0.04-0.50; P = 0.002). Children in Gambia who survive hospital admission with hypoxaemic pneumonia have a good prognosis. Survival depends more on nutritional status than on having been hypoxaemic. Investment in oxygen therapy appears justified, and efforts should be made to improve nutrition in malnourished children with pneumonia.