Summary Background The American Heart Association recommends cardiopulmonary resuscitation (CPR) by bystanders with chest compression only for adults who have cardiac arrests, but not for children. We assessed the effect of CPR (conventional with rescue breathing or chest compression only) by bystanders on outcomes after out-of-hospital cardiac arrests in children. Methods In a nationwide, prospective, population-based, observational study, we enrolled 5170 children aged 17 years and younger who had an out-of-hospital cardiac arrest from Jan 1, 2005, to Dec 31, 2007. Data collected included age, cause, and presence and type of CPR by bystander. The primary endpoint was favourable neurological outcome 1 month after an out-of-hospital cardiac arrest, defined as Glasgow-Pittsburgh cerebral performance category 1 or 2. Findings 3675 (71%) children had arrests of non-cardiac causes and 1495 (29%) cardiac causes. 1551 (30%) received conventional CPR and 888 (17%) compression-only CPR. Data for type of CPR by bystander were not available for 12 children. Children who were given CPR by a bystander had a significantly higher rate of favourable neurological outcome than did those not given CPR (4·5% 110/2439 vs 1·9% 53/2719; adjusted odds ratio OR 2·59, 95% CI 1·81–3·71). In children aged 1–17 years who had arrests of non-cardiac causes, favourable neurological outcome was more common after bystander CPR than no CPR (5·1% 51/1004 vs 1·5% 20/1293; OR 4·17, 2·37–7·32). However, conventional CPR produced more favourable neurological outcome than did compression-only CPR (7·2% 45/624 vs 1·6% six of 380; OR 5·54, 2·52–16·99). In children aged 1–17 years who had arrests of cardiac causes, favourable neurological outcome was more common after bystander CPR than no CPR (9·5% 42/440 vs 4·1% 14/339; OR 2·21, 1·08–4·54), and did not differ between conventional and compression-only CPR (9·9% 28/282 vs 8·9% 14/158; OR 1·20, 0·55–2·66). In infants (aged <1 year), outcomes were uniformly poor (1·7% 36/2082 with favourable neurological outcome). Interpretation For children who have out-of-hospital cardiac arrests from non-cardiac causes, conventional CPR (with rescue breathing) by bystander is the preferable approach to resuscitation. For arrests of cardiac causes, either conventional or compression-only CPR is similarly effective. Funding Fire and Disaster Management Agency and the Ministry of Education, Culture, Sports, Science and Technology (Japan).