We undertook active population-based surveillance in 5,000 urban households among children < 5 years old to determine invasive pneumococcal disease (IPD) incidence, serotype distribution, clinical presentation, and antimicrobial resistance, which have not been previously described in population-based studies from the region. IPD was documented by blood culture isolation. From 01 April 2004 to 31 March 2006, 5,903 blood cultures were collected from 6,167 eligible children. Streptococcus pneumoniae was isolated from 34 pneumococcal patients; IPD was clinically associated with pneumonia (24%), upper respiratory infection (62%), and febrile syndromes (14%). Overall, IPD and 13-valent serotype-related IPD incidences were 447 and 276 episodes/100,000 child-years, respectively. Peak IPD incidence occurred during the cool dry seasons. Penicillin, cotrimoxazole, chloramphenicol, and ciprofloxacin resistances were 2.9%, 82.4%, 14.7%, and 24.1%, respectively. Current conjugate vaccines should substantially reduce IPD, childhood pneumonia, and antimicrobial resistance in Bangladesh.