Short-term exposure to ambient temperature plays a significant role in human health. However, studies examining ambient temperature and lung function are scarce in locations with a tropical environment. To address this research gap, the current study investigated the effects of short-term ambient temperature on lung function in children and seasonal variation in this association in Dhaka, Bangladesh. The study was conducted in three schools located in three cities inside and around Dhaka. Repeated lung function measurements were obtained from a panel of 315 school children (including 86 asthmatic children) aged 9–16 years in 2013. Linear mixed-effects models adjusted for potential confounders were used to examine the effect of ambient temperature on lung function. Short-term exposure to low ambient temperature was associated with a significant decrement in children's lung function. For each 1 °C decrease in daily mean temperature at cumulative lag of the current and previous day, lung function parameter values were −3.02% (95% CI, −1.69 to −4.35) for peak expiratory flow (PEF), and −1.48% (95% CI, −0.75 to −2.22) for forced expiratory volume within 1 s (FEV1). A significant seasonal variation was also observed in these associations, as the estimated adverse effects of decrease in daily mean temperature on lung function measures were primarily evident in winter. This study suggests that short-term ambient exposure to decrease in temperature adversely affect lung function. A significant seasonal modification in the association between temperature and lung function was also observed for these children living in an environment with a tropical climatic condition as the adverse effect of decrease in ambient temperature was primarily observed in winter than in summer. • We investigated the effects of short-term ambient temperature on lung function in children in Dhaka, Bangladesh. • Repeated lung function measurements were used from a panel of 315 school children (including 86 asthmatic) aged 9-16 years. • Short-term ambient exposure to deceasing temperature is an independent risk factors for children’s living in a tropical climate. • These effects of temperature on lung function had significant seasonal variation.