Inclusion Criteria:

• Children aged three to 59 months admitted with severe pneumonia. Severe pneumonia is defined as lower chest indrawing in children with cough and/or difficult breathing, who are able to drink and do not have central cyanosis, regardless of the respiratory rate. Known HIV infected patients in clinical category N or A (CDC) will be included.

Exclusion Criteria:

• Presence of any danger sign during current illness (convulsions, abnormally sleepy or difficult to awake, stridor in a calm child).
• Severe malnutrition defined as weight for age equal or less than -3 SD or kwashiorkor).
• Hospitalization in the last two weeks. This will exclude cases with possible nosocomial pneumonia that could require second line antibiotics.
• Known prior episodes of asthma. These patients may have respiratory distress without infection and most often do not need antibiotics. Children having had 3 or more episodes of wheezing in the past will also be excluded. Wheezing that improves after receiving bronchodilator therapy, as explained in the footnote . These children may have asthma.
• Measles in the last month. These patients may have immune suppression.
• Previous history of HIV infection in clinical category B or C (CDC). These patients have immune suppression and infections that may require other diagnostic or treatment measures (see annex 1, page 39).
• Known or clinically recognizable chronic conditions (congenital cardiac or respiratory anomalies, chronic lung disease including bronchopulmonary dysplasia, neurological impairment that affects respiratory function, renal diseases, malignant or hematological diseases).
• Other diseases requiring antibiotic therapy on presenting, such as meningitis, evident tuberculosis, dysentery, osteomyelitis, septic arthritis, etc. Use of other antibiotics needed for treatment.
• Children Lower Chest Indrawing due to non-infective cause such cardiac failure, active rickets, or severe anemia, or with signs of severe dehydration according to WHO criteria (see annex 2, page 42).
• Children with SaO2 <80% in room air at sea level, or SaO2 < 75% in Bogota and Mexico (for measurement of oxygen saturation see Study Manual).
• Known prior anaphylactic reaction to penicillin or amoxycillin.
• Known antibiotic therapy for 48 hours or more prior to admission. Clinically, these children would be considered for a change of treatment to second line antibiotics on admission. Evidence of antibiotic use include any of the following: a) parental report that an antibiotics has been given; b) parent can provide evidence for prescription for antibiotics or c) has the container with antibiotic or d) recognizes medication when shown appropriate containers for locally available antibiotics. Children that have received antibiotics for less than 48 hours prior to admission will be accepted in the trial.
• Inability to receive oral medications (three or more episodes of vomiting per hour). These children should not be given oral antibiotics.
• Previous inclusion in the trial or children already included in another trial.
• Living outside the catchment area of the hospital. These patients may be difficult to follow after discharge.
• Parental or caretaker refusal to participate in the trial.