Participant observation strategies may be particularly effective for research involving children and their families in health care settings. These techniques, commonly used in ethnography and grounded theory, can elicit data and foster insights more readily than other research approaches, such as structured interviews or quantitative methods. This article outlines recommendations for the ethical conduct of participant observation in pediatric health care settings. This involves a brief overview of the significant contributions that participant observation can bring to our understanding of children and families in health care settings; an examination of the elements of participant observation that are necessary conditions for its effective conduct; an outline of contemporary ethical norms in Canada, the United Kingdom and the United States for research in pediatric health care settings; and a discussion of how participant observation research should be operationalized in order to comply with these norms.