Background: Acute respiratory illnesses with cough (ARIwC) are predominant causes of morbidity in Australian Indigenous children; however, data on disease burden in urban communities are scarce. This study aimed to determine the incidence of ARIwC, the predictors of recurrent (≥4 episodes) ARIwC, and development of chronic cough following an ARIwC in urban, predominantly Indigenous, children aged <5 years from northern Brisbane, Australia. Methods: Prospective cohort study of children aged <5 years registered with a primary healthcare center. ARIwC episodes and outcomes were collected for 12 months. Recurrent ARIwC was defined as ≥4 episodes in 12 months. Chronic cough was defined as cough lasting >4 weeks. Children who developed chronic cough were reviewed by a pediatric pulmonologist. Incidence densities per child-month of observation were calculated and predictors of recurrent ARIwC and chronic cough were evaluated in logistic regression models. Results: Between February 2013 and November 2015, 200 children were enrolled; median age of 18.1 months, range (0.7–59.7 months) and 90% identified as Indigenous. A total of 1,722 child-months of observation were analyzed (mean/child = 8.58, 95% CI 8.18–9.0). The incidence of ARIwC was 24.8/100 child-months at risk (95% CI 22.3–27.5). Twenty-one children (10.5%) experienced recurrent ARIwC. Chronic cough was identified in 70/272 (25.7%) episodes of ARIwC. Predictors of recurrent ARIwC were presence of eczema, mold in the house, parent/carer employment status, and having an Aboriginal and Torres Strait Islander mother/non-Aboriginal and Torres Strait Islander father (compared to both parents being Aboriginal and Torres Strait Islander). Predictors of chronic cough included being aged <12 months, eczema, childcare attendance, previous history of cough of >4 weeks duration, having an Aboriginal and Torres Strait Islander mother/non-Aboriginal and Torres Strait Islander father (compared to both parents being Aboriginal and Torres Strait Islander), and a low income. Of those with chronic cough reviewed by a pediatric pulmonologist, a significant underlying disorder was found in 14 children (obstructive sleep apnea = 1, bronchiectasis = 2, pneumonia = 2, asthma = 3, tracheomalacia = 6). Discussion: This community of predominantly Aboriginal and Torres Strait Islander and socially disadvantaged children bear a considerable burden of ARIwC. One in 10 children will experience more than three episodes over a 12-month period and 1 in five children will develop chronic cough post ARIwC, some with a serious underlying disorder. Further larger studies that include a broader population base are needed.