Pneumonia is the most common reason for pediatric hospitalizations. The impact of penicillin allergy labels among children with pneumonia has not been well studied. This study assessed the prevalence and impact of penicillin allergy labels among children admitted with pneumonia over a 3-year period at a large academic children’s center. Inpatient charts of pneumonia admissions with a documented allergy to a type of penicillin from January to March in 2017, 2018, and 2019 were reviewed and compared with pneumonia admissions without the label over the same time with regard to days of antimicrobial treatment, route of antimicrobial therapy, and days of hospitalization. There were 470 admissions for pneumonia during this time period, of which 48 patients (10.2%) carried a penicillin allergy label. Hives and/or swelling comprised 20.8% of the allergy labels. Other labels included nonpruritic rashes, gastrointestinal GI symptoms, unknown/undocumented reactions, or other reasons. There were no significant differences between those with a penicillin allergy label to those without regarding days of antimicrobial treatment (inpatient and outpatient), route of antimicrobial therapy, and days of hospitalization. Those with a penicillin allergy label were less likely to be prescribed a penicillin product (p < 0.002). Of the 48 patients who were allergy labeled, 23% (11/48) were given a penicillin medication without adverse reaction. Ten percent of pediatric admissions for pneumonia had a label of penicillin allergy, similar to the overall population. The hospital course and clinical outcome were not significantly affected by the penicillin allergy label. The majority of documented reactions were of low risk for immediate allergic reactions.