Air pollution, a significant global health concern, notably impacts human well-being. Children, owing to their distinctive physiology and behavior, are particularly susceptible to its adverse effects. This prospective study examines air quality variations and respiratory risks in children residing in critically polluted areas (CPA) compared to relatively non-polluted areas (NPA), utilizing a prospective design to understand the impacts of air pollution on children's respiratory health, including measures like relative risk (RR) and attributable risk (AR). This prospective study tracked 739 students of 5th- 7th grade residing in CPA and NPA for one year, and measured the ambient and indoor air quality levels in both these areas. Throughout the study, based on the observed respiratory symptoms new episodes of upper and lower respiratory tract illnesses were recorded for each child on a weekly basis. Incidence rate, RR and AR for both the illnesses were compared. Statistical analysis was performed with SPSS 26.0. The study observes higher concentration for particulate matter and gaseous pollutants at CPA in comparison to NPA. Children living in CPA exhibited a notably greater weekly occurrence of both upper and lower respiratory tract illnesses compared to those in NPA, with RR of 1.26 (95% CI: 1.16-1.37) and 1.74 (95% CI: 1.34-2.27), respectively. The AR associated with air pollution for upper and lower respiratory tract illnesses among CPA students was found to be 20.7% and 42.7%, respectively. This research underscores the pressing need to address air pollution in critically polluted areas and its profound effects on children's respiratory health. Public health interventions, such as reducing emissions from industries and creating green spaces, should be prioritized. Furthermore, early respiratory health screening in schools within polluted areas could aid in the timely diagnosis and management of respiratory issues in children.