Background: In Africa, the clinical syndrome of pneumonia remains the leading cause of morbidity and mortality in children in the post-neonatal period. This represents a significant burden on in-patient services. The targeted use of oxygen and simple, non-invasive methods of respiratory support may be a highly cost-effective means of improving outcome, but the optimal oxygen saturation threshold that results in benefit and the best strategy for delivery are yet to be tested in adequately powered randomised controlled trials. There is, however, an accumulating literature about the harms of oxygen therapy across a range of acute and emergency situations that have stimulated a number of trials investigating permissive hypoxia. Methods: In 4200 African children, aged 2 months to 12 years, presenting to 5 hospitals in East Africa with respiratory distress and hypoxia (oxygen saturation < 92%), the COAST trial will simultaneously evaluate two related interventions (targeted use of oxygen with respect to the optimal oxygen saturation threshold for treatment and mode of delivery) to reduce shorter-term mortality at 48-hours (primary endpoint), and longer-term morbidity and mortality to 28 days in a fractional factorial design, that compares: Liberal oxygenation (recommended care) compared with a strategy that permits hypoxia to SpO2 > or = 80% (permissive hypoxia); and High flow using AIrVO2TM compared with low flow delivery (routine care). Discussion: The overarching objective is to address the key research gaps in the therapeutic use of oxygen in resource-limited setting in order to provide a better evidence base for future management guidelines. The trial has been designed to address the poor outcomes of children in sub-Saharan Africa, which are associated with high rates of in-hospital mortality, 9-10% (for those with oxygen saturations of 80-92%) and 26-30% case fatality for those with oxygen saturations <80%.