Pneumonia affects 7% of the global population, resulting in 2 million pediatric deaths every year. Chest X-ray (CXR) analysis is routinely performed to diagnose the disease. Computer-aided diagnostic (CADx) tools aim to supplement decision-making. These tools process the handcrafted and/or convolutional neural network (CNN) extracted image features for visual recognition. However, CNNs are perceived as black boxes since their performance lack explanations. This is a serious bottleneck in applications involving medical screening/diagnosis since poorly interpreted model behavior could adversely affect the clinical decision. In this study, we evaluate, visualize, and explain the performance of customized CNNs to detect pneumonia and further differentiate between bacterial and viral types in pediatric CXRs. We present a novel visualization strategy to localize the region of interest (ROI) that is considered relevant for model predictions across all the inputs that belong to an expected class. We statistically validate the models’ performance toward the underlying tasks. We observe that the customized VGG16 model achieves 96.2% and 93.6% accuracy in detecting the disease and distinguishing between bacterial and viral pneumonia respectively. The model outperforms the state-of-the-art in all performance metrics and demonstrates reduced bias and improved generalization.