Implementing the World Health Organization (WHO) recommendations on home-based management of pneumonia with chest indrawing is challenging in many settings. In Papua New Guinea, 120 children presenting with the WHO definition of pneumonia were screened for danger signs, comorbidities and hypoxaemia using pulse oximetry; 117 were appropriate for home care. We taught mothers about danger signs and when to return, using structured teaching materials and a video. The children were given a single dose of intramuscular benzylpenicillin, then sent home on oral amoxicillin for 5 days, with follow-up at Days 2 and 6. During the course of treatment, five (4%) of the 117 children were admitted and 15 (13%) were lost to follow-up. There were no deaths. Treating children with pneumonia with chest indrawing but no danger signs is feasible as long as safeguards are in place-excluding high-risk patients, checking for danger signs and hypoxemia and providing education for mothers and follow-up.