BACKGROUND: Integrated Management of Childhood Illness (IMCI) guidelines were developed to decrease morbidity and mortality, yet implementation varies across settings. Factors associated with poor adherence are not well understood. METHODS: We used data from Manhica District Hospital outpatient department and five peripheral health centers to examine pneumonia management for children <5 years old from January 2008 to June 2011. Episodes of IMCI-defined pneumonia (cough or difficult breathing plus tachypnea), severe pneumonia (pneumonia plus chest wall in-drawing), and/or clinician-diagnosed pneumonia (based on discharge diagnosis) were included. RESULTS: Among severe pneumonia episodes, 96.2% (2,918/3,032) attended in the outpatient department and 70.0% (291/416) attended in health centers were appropriately referred to the emergency department. Age<1 year, malnutrition and various physical exam findings were associated with referral. For non-severe pneumonia episodes, antibiotics were prescribed in 45.7% (16,094/35,224). Factors associated with antibiotic prescription included age <1 year, abnormal auscultatory findings, and clinical diagnosis of pneumonia; diagnosis of malaria or gastroenteritis and pallor were negatively associated with antibiotic prescription. CONCLUSION: Adherence to recommended management of severe pneumonia was high in a hospital outpatient department, but suboptimal in health centers. Antibiotics were prescribed in fewer than half of non-severe pneumonia episodes, and diagnosis of malaria was the strongest risk factor for incorrect management.