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Background Penicillin allergy is the most common antibiotic allergy, yet most children labeled as allergic tolerate penicillin. The impact of inaccurate penicillin allergy labels (PALs) on pediatric outpatients is unknown. The objective of this study was to compare outcomes between children with and without a PAL after treatment for outpatient respiratory tract infections (RTI). Methods A retrospective, longitudinal birth cohort study was performed in children who received care in 90 pediatric primary care practices in Philadelphia and Houston metropolitan areas. Prescribing and clinical outcomes of children with a PAL at the time of an RTI were compared to non-allergic children, adjusting for potential confounders. Results Antibiotics were prescribed for 663,473 non-recurrent RTIs among 200,977 children. Children with a PAL (5% of cohort) were more likely than non-allergic children to receive broad-spectrum antibiotics (adjusted relative risk (aRR) 3.24, 95% CI 3.22-3.26) and second-line antibiotics (aRR 4.87, 95% CI 4.83, 4.89). Compared to non-allergic children receiving first-line antibiotics, children with a PAL were more likely to return with adverse drug events (aRR 1.28, 95% CI 1.18–1.39). There was no difference in treatment failure between groups (aRR 0.95, 95% CI 0.90–1.00). Conclusions PALs lead to higher rates of broad-spectrum and second-line antibiotic prescribing in children treated for RTIs in primary care and contribute to unnecessary healthcare utilization through increased adverse events. Given the frequency of PALs, efforts to prevent inappropriate penicillin allergy labeling and promote de-labeling of existing inaccurate allergy labels may improve care of children treated for common bacterial infections. [ABSTRACT FROM AUTHOR]