We performed a prospective, observational, cohort study of children newly diagnosed with children's interstitial lung disease (ChILD), with structured follow-up at 4, 8, 12 weeks and 6 and 12 months. 127 children, median age 0.9 (IQR 0.3-7.9) years had dyspnoea (68%, 69/102), tachypnoea (75%, 77/103) and low oxygen saturation (SpO2) median 92% (IQR 88-96). Death (n=20, 16%) was the most common in those <6 months of age with SpO2<94% and developmental/surfactant disorders. We report for the first time that ChILD survivors improved multiple clinical parameters within 8-12 weeks of diagnosis. These data can inform family discussions and support clinical trial measurements.