Background: Pneumonia is the major cause of mortality and morbidity in children worldwide. Procalcitonin (PCT) and C-reactive protein (CRP) are used in developed countries to differentiate between viral and bacterial causes of pneumonia. Validity of these markers needs to be further explored in Africa. Methodology and Principal Findings: We assessed the utility of PCT and CRP to differentiate viral from invasive bacterial pneumonia in children <5 years hospitalized with clinical severe pneumonia (CSP) in rural Mozambique, a malaria-endemic area with high HIV prevalence. Prognostic capacity of these markers was also evaluated. Out of 835 children with CSP, 87 fulfilled definition of viral pneumonia and 89 of invasive bacterial pneumonia. In absence of malaria parasites, levels of PCT and CRP were lower in the viral group when compared to the invasive bacterial one (PCT: median = 0.21 versus 8.31 ng/ml, p<0.001; CRP: 18.3 vs. 185.35 mg/l, p<0.001). However, in presence of malaria parasites distribution between clinical groups overlapped (PCT: median = 23.1 vs. 21.75 ng/ml, p = 0.825; CRP: median = 96.8 vs. 217.4 mg/l, p = 0.052). None of the two markers could predict mortality. Conclusions: Presence of malaria parasites should be taken into consideration, either for clinical or epidemiological purposes, if using PCT or CRP to differentiate viral from invasive bacterial pneumonia in malaria-endemic areas.