This cluster randomized, open labeled trial was conducted to compare the effectiveness of 3 days of oral amoxycillin and 5 days of co-trimoxazole treatment in terms of clinical failure in children with World Health Organization (WHO) defined non-severe pneumonia in primary health centers in rural India. Participants were children aged 2–59 months with WHO defined non-severe pneumonia, with or without wheeze, who were accessible to follow up. From seven primary health centers in each arm, 2009 cases were randomized, 993 and 1016 in treatment with amoxycillin and co-trimoxazole, respectively. Fever was present in 1247 (62.1%) and wheeze in 443 (22.1%). There was good adherence and low loss to follow-up. Clinical failure on amoxycillin and co-trimoxazole on intention to treat analysis was 137 and 97, respectively (absolute difference=0.04, 95% confidence interval: − 0.035–0.12). We conclude that there was no difference in effectiveness of oral co-trimoxazole or amoxycillin in treating non-severe pneumonia.