BackgroundPneumonia is a leading cause of death among children under 5 specifically in South Asia and sub-Saharan Africa. Hypoxaemia is a life-threatening complication among children under 5 with pneumonia. Hypoxaemia increases risk of mortality by 4.3 times in children with pneumonia than those without hypoxaemia. Prevalence of hypoxaemia varies with geography, altitude and severity (9%–39% Asia, 3%–10% African countries). In this protocol paper, we describe research methods for assessing impact of Lady Health Workers (LHWs) identifying hypoxaemia in children with signs of pneumonia during household visits on acceptance of hospital referral in district Jamshoro, Sindh.Methods and analysisA cluster randomised controlled trial using pulse oximetry as intervention for children with severe pneumonia will be conducted in community settings. Children aged 0–59 months with signs of severe pneumonia will be recruited by LHWs during routine visits in both intervention and control arms after consent. Severe pneumonia will be defined as fast breathing and/or chest in-drawing, and, one or more danger sign and/or hypoxaemia (Sa02 <92%) in PO (intervention) group and fast breathing and/or chest in-drawing and one or more danger sign in clinical signs (control) group. Recruits in both groups will receive a stat dose of oral amoxicillin and referral to designated tertiary health facility. Analysis of variance will be used to compare baseline referral acceptance in both groups with that at end of study.Ethics and disseminationEthical approval was granted by the Ethics Review Committee of the Aga Khan University (4722-Ped-ERC-17), Karachi. Study results will be shared with relevant government and non-governmental organisations, presented at national and international research conferences and published in international peer-reviewed scientific journals.Trial registration numberNCT03588377.