Crohn's disease (CD) is a chronic inflammatory condition that can affect the gastrointestinal tract and cause significant extraintestinal manifestations. Diagnosing and monitoring disease activity, especially in pediatric patients, remains a challenge due to the variable clinical presentations and limitations of traditional imaging methods. This study aimed to evaluate and compare the diagnostic accuracy and clinical utility of small bowel capsule endoscopy (SBCE) versus magnetic resonance enterography (MRE) for assessing disease activity and extent in pediatric Crohn's disease using the Pediatric Crohn's Disease Activity Index (PCDAI) and Simple Endoscopic Score for Crohn's Disease (SES-CD) as reference standards. In this prospective study, 52 pediatric patients with newly diagnosed CD underwent upper and lower endoscopy, MRE, and SBCE. The SBCE images were analyzed using the Capsule Endoscopy Crohn's Disease Activity Index (CECDAI), while the MRE images were scored using the Crohn's Disease MRI Index (CDMI). Correlations of these findings with PCDAI and SES-CD were statistically analyzed. CECDAI and CDMI demonstrated strong correlations with PCDAI (r = 0.517 and r = 0.525, respectively; < 0.001). The correlations between CECDAI and SES-CD were less pronounced but significant. SBCE and MRE showed comparable efficacy in detecting small bowel lesions, with both methods offering valuable insights into the disease status. SBCE is a reliable, non-invasive tool for diagnosing and monitoring pediatric CD, comparable to MRE. While SBCE offers higher resolution for mucosal evaluation, it requires additional expertise for optimal interpretation. The adoption of SBCE alongside MRE could enhance diagnostic accuracy and early therapeutic interventions for pediatric CD.