Background Pneumonia is an acute respiratory infection of the lungs. A child dies of pneumonia every 39 s globally. Even though pneumonia affects children worldwide, the risk and repercussions of the disease are more prevalent in poor and middle-income nations. Despite the initiatives by the Ethiopian government, there are still numerous instances and deaths caused by childhood pneumonia. Therefore, this study aimed to identify the risk factors for pneumonia among 2–59 months-old children visiting Adama Hospital Medical College, Adama, Ethiopia. Methods An institution-based unmatched case-control study was conducted among 124 cases and 124 controls from January 1, 2021, to March 15, 2021. Cases were selected using a consecutive sampling technique. For each case, the next patient from the same pediatric outpatient room who met the inclusion criteria was taken as a control. Data were collected using a pretested, structured interviewer-administered questionnaire containing sociodemographic, environmental, and nutritional factors, comorbid illnesses, and related care practices. A multiple logistic regression model was fitted. Results Family size of ≥ 5 compared to < 5 (Adjusted odds ratio (AOR): 3.08, 95% CI: 1.23, 7.71), household monthly income of < 2500 compared to > 5000 birr (AOR: 3.94, 95% CI: 1.06, 14.6), use of charcoal as the main fuel for cooking (AOR: 7.03, 95% CI: 2.38, 20.78), and wood or dung as the main fuel for cooking compared to electricity (AOR: 6.58, 95% CI: 2.07, 20.9), malnutrition compared to no malnutrition (AOR: 4.77, 95% CI: 1.89, 12.06), diarrhea compared to no diarrhea in the past 2 weeks (AOR: 3.3, 95% CI: 1.52, 7.14) and upper respiratory tract infection (URTI) compared to no infection in the past 2 weeks (AOR: 3.29, 95% CI: 1.31, 8.23) were found to be risk factors for pneumonia. Conclusion In this study, risk factors for pneumonia were family size, monthly income, type of energy used for cooking, malnutrition, and diarrhea or URTI in the past 2 weeks. Relatively simple interventions such as cooking with electricity, and other interventions like prevention, early detection and treatment of malnutrition, diarrhea, and URTI, and promotion of family planning are important.