The objective of this study is to examine the association between ambient temperature and children's lung function in Baotou, China. We recruited 315 children (8-12 years) from Baotou, China in the spring of 2004, 2005, and 2006. They performed three successive forced expiratory measurements three times daily (morning, noon, and evening) for about 5 weeks. The highest peak expiratory flow (PEF) was recorded for each session. Daily data on ambient temperature, relative humidity, and air pollution were monitored during the same period. Mixed models with a distributed lag structure were used to examine the effects of temperature on lung function while adjusting for individual characteristics and environmental factors. Low temperatures were significantly associated with decreases in PEF. The effects lasted for lag 0-2 days. For all participants, the cumulative effect estimates (lag 0-2 days) were -1.44 (-1.93, -0.94) L/min, -1.39 (-1.92, -0.86) L/min, -1.40 (-1.97, -0.82) L/min, and -1.28 (-1.69, -0.88) L/min for morning, noon, evening, and daily mean PEF, respectively, associated with 1 °C decrease in daily mean temperature. Generally, the effects of temperature were slightly stronger in boys than in girls for noon, evening, and daily mean PEF, while the effects were stronger in girls for morning PEF. PM2.5 had joint effects with temperature on children's PEF. Higher PM2.5 increased the impacts of low temperature. Low ambient temperatures are associated with lower lung function in children in Baotou, China. Preventive health policies will be required for protecting children from the cold weather.