Background: Although hypoxemic children have high mortality, little is known about hypoxemia prevalence and oxygen administration in African hospitals. We aimed to determine the hypoxemia prevalence and quality of oxygen treatment by local clinicians for hospitalized Malawian children. Methods: The study was conducted in five Malawian hospitals during January-April 2011. We prospectively measured the peripheral oxygen saturation (SpO2) using pulse oximetry for all children, 15 years old and also determined clinical eligibility for oxygen treatment using WHO criteria for children, 5 years old. We determined oxygen treatment quality by Malawian clinicians by comparing their use of WHO criteria for patients, 5 years old using two standards: hypoxemia (SpO2, 90%) and the use of WHO criteria by study staff. Results: Forty of 761 (5.3%) hospitalized children, 15 years old had SpO2, 90%. No hospital used pulse oximetry routinely, and only 9 of 40 (22.5%) patients, 15 years old with SpO2, 90% were treated with oxygen by hospital staff. Study personnel using WHO criteria for children, 5 years old achieved a higher sensitivity (40.0%) and lower specificity (82.7%) than Malawian clinicians (sensitivity 25.7%, specificity 94.1%). Conclusion: Although hypoxemia is common, the absence of routine pulse oximetry results in most hospitalized, hypoxemic Malawian children not receiving available oxygen treatment. © Royal Society of Tropical Medicine and Hygiene 2013. All rights reserved.