Air pollution is a major cause of sub-optimal lung function and lung diseases in childhood and adulthood. In this study we compared the lung function (measured by spirometry) of 537 Ugandan children, mean age 11.1 years in sites with high (Kampala and Jinja) and low (Buwenge) ambient air pollution levels, based on the concentrations of particulate matter smaller than 2.5 micrometres in diameter (PM2.5). Factors associated with lung function were explored in a multiple linear regression model. PM2.5 level in Kampala, Jinja and Buwenge were 177.5 µg/m³, 96.3 µg/m³ and 31.4 µg/m³ respectively (p = 0.0000). Respectively mean forced vital capacity as % of predicted (FVC%), forced expiratory volume in one second as % of predicted (FEV1%) and forced expiratory flow 25⁻75% as % of predicted (FEF25⁻75%) of children in high ambient air pollution sites (Kampala and Jinja) vs. those in the low ambient air pollution site (Buwenge subcounty) were: FVC% (101.4%, vs. 104.0%, p = 0.043), FEV1% (93.9% vs. 98.0, p = 0.001) and FEF25⁻75% (87.8 vs. 94.0, p = 0.002). The proportions of children whose %predicted parameters were less than 80% predicted (abnormal) were higher among children living in high ambient air pollution than those living in lower low ambient air pollutions areas with the exception of FVC%; high vs. low: FEV1 < 80%, %predicted (12.0% vs. 5.3%, p = 0.021) and FEF25⁻75 < 80%, %predicted (37.7% vs. 29.3%, p = 0.052) Factors associated with lung function were (coefficient, p-value): FVC% urban residence (-3.87, p = 0.004), current cough (-2.65, p = 0.048), underweight (-6.62, p = 0.000), and overweight (11.15, p = 0.000); FEV1% underweight (-6.54, p = 0.000) and FEF25⁻75% urban residence (-8.67, p = 0.030) and exposure to biomass smoke (-7.48, p = 0.027). Children in study sites with high ambient air pollution had lower lung function than those in sites with low ambient air pollution. Urban residence, underweight, exposure to biomass smoke and cough were associated with lower lung function.