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The tuberculosis burden in children exposed at home to multidrug-resistant tuberculosis (MDR-TB) is unquantified. With limited access to MDR-TB treatment, likely millions of children share the experience of chronic exposure to an infectious patient.We conducted a retrospective cohort study of child and adult household contacts of patients treated for MDR-TB in Lima, Peru, in 1996 to 2003. The primary outcome was TB disease. We estimated prevalence of TB disease when the index case began MDR-TB treatment and incidence of TB disease over the subsequent 4 years.Among 1299 child contacts, 67 were treated for TB. TB prevalence was 1771 (confidence interval [CI]: 1052–2489) per 100,000 children. In 4362 child-years of follow-up, TB incidence rates per 100,000 child-years were: 2079 (CI: 1302–2855) in year 1; 315 (CI: 6–624) in year 2; 634 (CI: 195–1072) in year 3; and 530 (CI: 66–994) in year 4. TB disease rates in children aged >1 year were not significantly different from those observed in adults. Children accounted for 20% of TB cases. Seven (87.5%) of 8 children tested had MDR-TB. Child contacts had TB disease rates approximately 30 times higher than children in the general population.Children were at high risk for TB disease when the index case started MDR-TB treatment and during the following year. These results highlight the need for implementing contact investigations and establishing systems for prompt referral and treatment of pediatric household contacts of MDR-TB patients, regardless of the age of the child.