Objective We undertook this study to validate the Pediatric Arthritis Ultrasound Scoring System for the knee joint (PAUSS‐knee) in children with juvenile idiopathic arthritis (JIA). Methods Children with JIA were enrolled to prospectively receive a musculoskeletal ultrasound (MSUS) examination of the knee and a physical examination to determine presence/absence of clinical arthritis. MSUS images were scored using the PAUSS‐knee, a semiquantitative MSUS scoring system (0–3, normal to severe) for B‐mode and power Doppler mode. In addition to MSUS, a subset of participants also received magnetic resonance imaging (MRI) of the knee, which was scored according to the combined Juvenile Arthritis MRI Scoring (JAMRIS) system. Spearman's correlations (rs) were used to calculate associations between variables. Test characteristics of the PAUSS‐knee were calculated with MRI as the reference standard. Inflammatory biomarkers were assessed in synovial fluid from involved knees. Results Eighty children with JIA contributed 112 MSUSs and 25 MRIs of the knee. Of the knees, 41% (n = 46) had clinical evidence of arthritis. The B‐mode PAUSS‐knee score moderately correlated with clinically determined arthritis (rs = 0.54, P < 0.001) and strongly correlated with the JAMRIS score (rs = 0.75, P < 0.001). Compared with MRI, the area under the curve for the B‐mode PAUSS‐knee was 0.92. For a cutoff of >1, the B‐mode PAUSS‐knee had a sensitivity of 83% and specificity of 82%. Biomarker analysis indicates that interleukin‐2R levels correlate with PAUSS score. Conclusion Our data indicate that the PAUSS‐knee has excellent accuracy for the diagnosis of arthritis when compared with MRI. The PAUSS‐knee has the potential to effectively inform JIA medical decision‐making in real time.