Pneumonia is the most common reason for visiting an outpatient facility among children <5 years old in Fiji. The objective of this study is to describe for the first time the costs associated with an episode of outpatient pneumonia in Fiji, in terms of cost both to the government health sector and to the household. Costs were estimated for 400 clinically diagnosed pneumonia cases from two outpatient facilities, one in the capital, Suva, and one in a peri-urban and rural area, Nausori. Household expenses relating to transport costs, treatment costs and indirect costs were determined primarily through structured interview with the caregiver. Unit costs were collected from a variety of sources. Patient-specific costs were summarised as average costs per facility. The overall average societal cost associated with an episode of outpatient pneumonia was $18.98, ranging from $14.33 in Nausori to $23.67 in Suva. Household expenses represent a significant proportion of the societal cost (29% in Nausori and 45% in Suva), with transport costs the most important household cost item. Health sector expenses were dominated by personnel costs at both sites. Both the average total household expenses and the average total health sector expenses were significantly greater in Suva than Nausori. A single episode of outpatient pneumonia represents a significant cost both to the government health sector and to affected households. Given the high incidence of this disease in Fiji, this places a considerable burden on society.