OBJECTIVES To describe the short-term outcomes in Aboriginal children admitted to hospital with radiological alveolar lobar changes; and determine whether predischarge chest radiography can predict respiratory morbidity found at follow-up. DESIGN, PARTICIPANTS, SETTING: Prospective cohort study of Aboriginal children admitted to Alice Springs Hospital between October 2000 and April 2001 with alveolar lobar abnormalities (area of consolidation, > or = 1 cm) on chest radiographs. Participants were to have a predischarge radiograph and be followed up for 12 months. MAIN OUTCOME MEASURES Comorbidities, follow-up rate, and new respiratory disease found at follow-up. RESULTS Of 113 children hospitalised with radiological alveolar lobar changes, 109 were Aboriginal. Their median age was 1.8 years (range, 0.2 months-13.3 years), and 124 episodes were recorded. Comorbidities were common in these children (anaemia, 51.5%; suppurative otitis media, 37.3%). The follow-up rate one year after admission was 83.1% of episodes. New treatable chronic respiratory morbidity was found in 20 (25.6%) of the 78 children with completed follow-up. Predischarge chest radiographs were predictive of all chronic respiratory morbidity when they showed no or minimal resolution (0-20% resolution) (relative risk, 7.43; 95% CI, 2.07-26.60). CONCLUSIONS Central Australian Aboriginal children admitted to hospital with alveolar changes on chest radiographs have a substantial burden of chronic respiratory illness, and should be clinically followed up for early detection and management of chronic respiratory morbidity. A predischarge radiograph is useful, and patients whose radiograph shows no or minimal resolution should have a follow-up x-ray film.