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Introduction There is scarcity of data on children with disabilities living in low-and-middle-income countries, including Uganda. This study describes disability prevalence and explores factors associated with different disability categories. It highlights the value of using a standardized, easy-to-use tool to determine disability in children and contextualizing disability in children in light of their developmental needs. Methods A cross-sectional study was conducted between September 2018–January 2019 at the Iganga-Mayuge Health and Demographic Surveillance Site in Uganda. Respondents were caregivers of children between 5–17 years and were administered an in-depth Child Functioning Module (CFM). The outcome variable, disability, was defined as an ordered categorical variable with three categories–mild, moderate, and severe. Generalized ordered logit model was applied to explore factors associated with disability categories. Results Out of 1,842 caregivers approached for the study, 1,439 (response: 78.1%) agreed to participate in the study. Out of these 1,439, some level of disability was reported by 67.89% (n = 977) of caregivers. Of these 977 children with disability, 48.01% (n = 692) had mild disability and 15.84% (n = 228) had moderate disability, while 3.96% (n = 57) had severe disability. The mean (SD) score for mild disability was 2.22±1.17, with a median of 2. The mean and median for moderate disability was 5.26±3.28 and 4 (IQR:3–6), and for severe disability was 14.23±9.51 and 12 (IQR:6–22). The most common disabilities reported were depression (54.83%) and anxiety (50.87%). Statistically significant association was found for completion of immunization status and school enrollment when controlled for a child’s age, sex, having a primary caregiver, age of mother at child’s birth, family system, family size and household wealth quintile. Conclusion This study suggests association between incomplete immunization status and school enrollment for children with disability. These are areas for further exploration to ensure inclusive health and inclusive education of children with disabilities in Uganda.