Pneumonia is the leading cause of hospitalization in pediatric patients. Disease severity greatly influences pneumonia progression and adverse health outcomes such as hospital readmission. Hospital readmissions have become a measure of healthcare quality to reduce excess expenditures. The aim of this study was to examine 30-day all-cause readmission rates and evaluate the association between pneumonia severity and readmission among pediatric pneumonia hospitalizations. Using 2018 Nationwide Readmissions Database (NRD), we conducted a cross-sectional study of pediatric hospitalizations for pneumonia. Pneumonia severity was defined by the presence of respiratory failure, sepsis, mechanical ventilation, dependence on long-term supplemental oxygen, and/or respiratory intubation. Outcomes of interest were 30-day all-cause readmission, length of stay, and cost. The rate of 30-day readmission for the total sample was 5.9%, 4.7% for non-severe pneumonia, and 8.7% for severe pneumonia (p < 0.01). Among those who were readmitted, hospitalizations for severe pneumonia had a longer length of stay (6.5 vs. 5.4 days, p < 0.01) and higher daily cost (USD 3246 vs. USD 2679, p < 0.01) than admissions for non-severe pneumonia. Factors associated with 30-day readmission were pneumonia severity, immunosuppressive conditions, length of stay, and hospital case volume. To reduce potentially preventable readmissions, clinical interventions to improve the disease course and hospital system interventions are necessary.