Background: Empyema thoracis (ET) is serious complication of pneumonia in children, treatment outcome depends upon many risk factors. Empyema thoracis is a serious infection of the pleural space. Despite the availability of broad spectrum antibacterial, improved vaccination coverage and better diagnostic tools, ET remains associated with high morbidity worldwide. This study was undertaken to identify risk factors associated with poor outcome and to describe etiological agents.Methods: This nested case control study was conducted at Institute of Child Health and Hospital for Children, Egmore, and Chennai from January 2011 to October 2012 in age group from 1 month to 12 years attending with clinical/radiological evidence of empyema. Cases children with complications and controls without complications. Basic investigations, ultrasonogram chest, pleural fluid gram stain/ culture and blood culture done. Antibiotics started empirically and changed based on culture and sensitivity. Intercostal drainage (ICD) was inserted with an underwater seal. Demographic data and other variables analysed were haemoglobin, persistent positive CRP, serum albumin level, pleural fluid gram stain, culture and sensitivity, imaging like ultra-sonogram, CECT, X-ray chest after ICD insertion.Results: Of 90 empyema cases, 26 recovered without complication, 56 recovered with complication, 8 died. Logistic regression uses to find association between variables and complications. Risk factors significantly associated with complications were persistent positive CRP, pleural fluid gram stain, imaging ultra-sonogram chest showing loculations, CECT scan showing pleural thickening and X-ray chest after ICD insertion.Conclusions: Independent risk factors associated with complications were X-ray chest after ICD insertion showing non-resolution, ultrasonogram revealing loculations and septations. Early diagnosis, appropriate antibiotics and timely intervention helps in reduction of empyema and complications.