Race-based and skin pigmentation-related inaccuracies in pulse oximetry have recently been highlighted in several large electronic health record-based retrospective cohort studies across diverse patient populations and healthcare settings. Overestimation of oxygen saturation by pulse oximeters, particularly in hypoxic states, is disparately higher in Black compared to other racial groups. Compared to adult literature, pediatric studies are relatively few and mostly reliant on birth certificates or maternal race-based classification of comparison groups. Neonates, infants, and young children are particularly susceptible to the adverse life-long consequences of hypoxia and hyperoxia. Successful neonatal resuscitation, precise monitoring of preterm and term neonates with predominantly lung pathology, screening for congenital heart defects, and critical decisions on home oxygen, ventilator support and medication therapies, are only a few examples of situations that are highly reliant on the accuracy of pulse oximetry. Undetected hypoxia, especially if systematically different in certain racial groups may delay appropriate therapies and may further perpetuate health care disparities. The role of biological factors that may differ between racial groups, particularly skin pigmentation that may contribute to biased pulse oximeter readings needs further evaluation. Developmental and maturational changes in skin physiology and pigmentation, and its interaction with the operating principles of pulse oximetry need further study. Importantly, clinicians should recognize the limitations of pulse oximetry and use additional objective measures of oxygenation (like co-oximetry measured arterial oxygen saturation) where hypoxia is a concern.