The aim of this study was to investigate spatial variation in risk of hospitalization in childhood pneumonia and empyema in the North of England and associated risk factors. Data on childhood (0-14 years) hospital admissions with a diagnosis pneumonia or empyema were linked to postcode districts. Bayesian conditional autoregressive models were used to evaluate spatial variation and the relevance of specific spatial covariates in an area-based study using postcode as the areal unit. There was a sixfold variation in the risk of hospitalization due to pneumonia across the study region. Variation in risk was associated with material deprivation, Child Well-being Index (CWI) health domain score, number of children requiring local authority support, and distance to hospital. No significant spatial variation in risk for empyema was found.