Malaria and severe pneumonia in hospitalized young children may show striking clinical similarities, making differential diagnosis challenging. We investigated ways to increase diagnostic accuracy in patients hospitalized with clinical symptoms compatible with malaria and severe pneumonia, in an area with high a prevalence of infection with human immunodeficiency virus. A total of 646 children admitted at the Manhiça District Hospital in Manhiça, Mozambique who met the World Health Organization clinical criteria for severe pneumonia and malaria were recruited for 12 months and thoroughly investigated to ascertain an accurate diagnosis. Although symptom overlap between malaria and severe pneumonia was frequent among hospitalized children, true disease overlap was uncommon. Clinical presentation and laboratory determinations were ineffective in reliably distinguishing between the two diseases. Infection with human immunodeficiency virus differentially influenced the epidemiology and clinical presentation of these two infectious diseases, further challenging their discrimination on clinical grounds, and having a greater impact on the current burden and prognosis of severe pneumonia.