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Hospitalisation due to respiratory syncytial virus (RSV) infection in the first 2 years after birth has been associated with increased healthcare utilisation and associated costs up to 5 years of age in children born prematurely at less than 32 weeks of gestation who developed bronchopulmonary dysplasia (BPD). A study was undertaken to determine whether hospitalisation due to RSV infection in the first 2 years was associated with increased morbidity and lung function abnormalities in such children at school age, and if any effects were influenced by age.Healthcare utilisation and cost of care in years 5–7 were reviewed in 147 children and changes in healthcare utilisation between 0 and 8 years were assessed also using results from two previous studies. At age 8–10 years, 77 children had their lung function assessed and bronchial hyper-responsiveness determined.Children hospitalised with RSV infection (n = 25) in the first 2 years had a greater cost of care related to outpatient attendance than those with a non-respiratory or no admission (n = 72) when aged 5–7 years (p = 0.008). At 8–10 years of age, children hospitalised with RSV infection (n = 14) had lower forced expiratory volume in 0.75 s (FEV0.75) (p = 0.015), FEV0.75/forced vital capacity (p = 0.027) and flows at 50% (p = 0.034) and 75% (p = 0.006) of vital capacity than children hospitalised for non-RSV causes (n = 63). Healthcare utilisation decreased with increasing age regardless of RSV hospitalisation status.In prematurely born children who had BPD, hospitalisation due to RSV infection in the first 2 years is associated with reduced airway calibre at school age.