Pneumonia is a leading cause of mortality in children <5 years globally. Early identification of hospitalized children with pneumonia who may fail antibiotics could improve outcomes. We conducted a secondary analysis from the Malawi CPAP IMPACT trial evaluating risk factors for antibiotic failure among children hospitalized with pneumonia. Participants were 1-59 months old with World Health Organization-defined severe pneumonia and hypoxemia, severe malnutrition, and/or HIV exposure/infection. All participants received intravenous antibiotics per standard care. First-line antibiotics were benzylpenicillin and gentamicin for five days. Study staff assessed patients for first-line antibiotic failure daily between days 3-6. When identified, patients failing antibiotics were switched to second-line ceftriaxone. Analyses excluded children receiving ceftriaxone and/or deceased by hospital day two. We compared characteristics between patients with and without treatment failure and fit multivariable logistic regression models to evaluate associations between treatment failure and admission characteristics. From June 2015-March 2018, 644 children were enrolled and 538 analyzed. Antibiotic failure was identified in 251 (46.7%) participants, and 19/251 (7.6%) died. Treatment failure occurred more frequently with severe malnutrition (50.2% (126/251) vs 28.2% (81/287), p<0.001) and amongst those dwelling ≥10km from a health facility (22.3% (56/251) vs 15.3% (44/287), p = 0.026). Severe malnutrition occurred more frequently among children living ≥10km from a health facility than those living <10km (49.0% (49/100) vs 35.7% (275/428), p = 0.014). Children with severe malnutrition (adjusted odds ratio (aOR) 2.2 (95% CI 1.52, 3.24), p<0.001) and pre-hospital antibiotics ((aOR 1.47, 95% CI 1.01, 2.14), p = 0.043) had an elevated aOR for antibiotic treatment failure. Severe malnutrition and pre-hospital antibiotic use predicted antibiotic treatment failure in this high-risk severe pneumonia pediatric population in Malawi. Our findings suggest addressing complex sociomedical conditions like severe malnutrition and improving pneumonia etiology diagnostics will be key for better targeting interventions to improve childhood pneumonia outcomes.