To evaluate risk factors for postdischarge sequelae in children and adolescents hospitalized for acute coronavirus disease 2019 (COVID-19) or multisystem inflammatory syndrome in children (MIS-C). Multicenter prospective cohort study conducted in 25 United States pediatric hospitals. Patients <21-years-old, hospitalized May 2020 to May 2021 for acute COVID-19 or MIS-C with follow-up 2 to 4 months after admission. We assessed readmissions, persistent symptoms or activity impairment, and new morbidities. Multivariable regression was used to calculate adjusted risk ratios (aRR) and 95% confidence intervals (CI). Of 358 eligible patients, 2 to 4 month survey data were available for 119 of 155 (76.8%) with acute COVID-19 and 160 of 203 (78.8%) with MIS-C. Thirteen (11%) patients with acute COVID-19 and 12 (8%) with MIS-C had a readmission. Thirty-two (26.9%) patients with acute COVID-19 had persistent symptoms (22.7%) or activity impairment (14.3%) and 48 (30.0%) with MIS-C had persistent symptoms (20.0%) or activity impairment (21.3%). For patients with acute COVID-19, persistent symptoms (aRR, 1.29 95% CI, 1.04-1.59) and activity impairment (aRR, 1.37 95% CI, 1.06-1.78) were associated with more organ systems involved. Patients with MIS-C and pre-existing respiratory conditions more frequently had persistent symptoms (aRR, 3.09 95% CI, 1.55-6.14) and those with obesity more frequently had activity impairment (aRR, 2.52 95% CI, 1.35-4.69). New morbidities were infrequent (9% COVID-19, 1% MIS-C). Over 1 in 4 children hospitalized with acute COVID-19 or MIS-C experienced persistent symptoms or activity impairment for at least 2 months. Patients with MIS-C and respiratory conditions or obesity are at higher risk of prolonged recovery.