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Background: Management of pneumonia in many low-income and middle-income countries is based on WHO guidelines that classify children according to clinical signs that define thresholds of risk. We aimed to establish whether some children categorised as eligible for outpatient treatment might have a risk of death warranting their treatment in hospital. Methods: We did a retrospective cohort study of children aged 2–59 months admitted to one of 14 hospitals in Kenya with pneumonia between March 1, 2014, and Feb 29, 2016, before revised WHO pneumonia guidelines were adopted in the country. We modelled associations with inpatient mortality using logistic regression and calculated absolute risks of mortality for presenting clinical features among children who would, as part of revised WHO pneumonia guidelines, be eligible for outpatient treatment (non-severe pneumonia). Findings: We assessed 16 162 children who were admitted to hospital in this period. 832 (5%) of 16 031 children died. Among groups defined according to new WHO guidelines, 321 (3%) of 11 788 patients with non-severe pneumonia died compared with 488 (14%) of 3434 patients with severe pneumonia. Three characteristics were strongly associated with death of children retrospectively classified as having non-severe pneumonia: severe pallor (adjusted risk ratio 5·9, 95% CI 5·1–6·8), mild to moderate pallor (3·4, 3·0–3·8), and weight-for-age Z score (WAZ) less than −3 SD (3·8, 3·4–4·3). Additional factors that were independently associated with death were: WAZ less than −2 to −3 SD, age younger than 12 months, lower chest wall indrawing, respiratory rate of 70 breaths per min or more, female sex, admission to hospital in a malaria endemic region, moderate dehydration, and an axillary temperature of 39°C or more. Interpretation: In settings of high mortality, WAZ less than −3 SD or any degree of pallor among children with non-severe pneumonia was associated with a clinically important risk of death. Our data suggest that admission to hospital should not be denied to children with these signs and we urge clinicians to consider these risk factors in addition to WHO criteria in their decision making. Funding: Wellcome Trust.