Pneumonia remains a leading cause of morbidity and mortality in young children. The total cost of pneumonia-related hospitalization, including household-level cost, is poorly understood. To better understand this burden in an urban setting in South America, we incorporated a cost study into a trial assessing zinc supplements in treatment of severe pneumonia among children aged 2-59 months at a public hospital in Quito, Ecuador, which provides such treatment at no charge. Data were collected from children's caregivers at hospitalization and discharge on out-of-pocket payments for medical and nonmedical items, and on employment and lost work time. Analyses encompassed three categories: direct medical costs, direct nonmedical costs, and indirect costs, which covered foregone wages (from caregivers' self-reported lost earnings) and opportunity cost of caregivers' lost time (based on the unskilled labor wage in Ecuador). Caregivers of 153 children completed all questionnaires. Overall, 57% of children were aged less than 12 months, and 46% were female. Just over 50% of mothers and fathers had completed middle school. Most reported direct costs, which averaged $33. Most also reported indirect costs, the mean of which was $74. Fifty-seven reported lost earnings (mean = $79); 29 reported lost time (estimated mean cost = $37). Stratified analyses revealed similar costs for children < 12 months and ≥ 12 months, with variations for specific items. Costs for hospital-based treatment of severe pneumonia in young children represent a major burden for households in low- to middle-income settings, even when such treatment is intended to be provided at no cost.