Psychotic symptoms are relatively common in children and adolescents attending mental health services. On most occasions, their presence is not associated with a primary psychotic disorder, and their clinical significance remains understudied. No studies to date have evaluated the prevalence and clinical correlates of psychotic symptoms in children requiring inpatient mental health treatment. All children aged 6 to 12 years admitted to an inpatient children’s unit over a 9-year period were included in this naturalistic study. Diagnosis at discharge, length of admission, functional impairment, and medication use were recorded. Children with psychotic symptoms without a childhood-onset schizophrenia spectrum disorder (COSS) were compared with children with COSS and children without psychotic symptoms using Chi-square and linear regressions. A total of 211 children were admitted during this period with 62.4% experiencing psychotic symptoms. The most common diagnosis in the sample was autism spectrum disorder (53.1%). Psychotic symptoms were not more prevalent in any diagnosis except for COSS (100%) and intellectual disability (81.8%). Psychotic symptoms were associated with longer admissions and antipsychotic medication use. The mean length of admission of children with psychotic symptoms without COSS seems to lie in between that of children without psychotic symptoms and that of children with COSS. We concluded that psychotic symptoms in children admitted to the hospital may be a marker of severity. Screening for such symptoms may have implications for treatment and could potentially contribute to identifying more effective targeted interventions and reducing overall morbidity.