Objective: It may be difficult for clinicians to estimate the prognosis of pediatric acute transverse myelitis (ATM). The aim of this study was to define prognostic factors for relapsing disease and poor outcome in pediatric ATM. Methods: This prospective cohort study included 49 children, 18 boys and 31 girls (median age 13.1 years, IQR 6.5–16.2) with a first episode of ATM. Factors associated with relapsing disease and poor outcome (Expanded Disability Status Scale (EDSS) ≥ 4) were assessed during a median follow-up of 37 months (IQR 18–75). Results: In total, 14 patients (29%) experienced ≥ 1 relapse(s) and nine patients (18%) had a poor outcome. Factors at onset associated with relapsing disease included higher age (16.1 vs. 11.6 years, p = 0.002), longer time to maximum severity of symptoms (5.5 vs. 3 days, p = 0.01), lower maximum EDSS score (4.0 vs. 6.5, p = 0.003), short lesion on spinal MRI (64 vs. 21%, p = 0.006), abnormalities on brain MRI (93 vs. 44%, p = 0.002) and presence of oligoclonal bands in cerebrospinal fluid (67 vs. 14%, p = 0.004). The only factor associated with poor outcome was presence of a spinal cord lesion on MRI without cervical involvement (56 vs. 14%, p = 0.02). Conclusion: Pediatric ATM patients presenting with clinical, radiological and laboratory features associated with multiple sclerosis (MS) are at risk for relapsing disease. In absence of these known MS risk factors at onset of disease these patients are at low risk for relapses. Only a minority of pediatric ATM patients in this cohort have a poor outcome.