Bacterial pneumonia and sepsis are common severe infectious diseases in pediatrics. The overlapping early clinical manifestations of these two conditions often lead to misdiagnosis. Establishing a precise early differential diagnostic method is crucial for improving patient outcomes. This retrospective cohort study enrolled 126 children with bacterial pneumonia, 116 children with sepsis, and 65 healthy children as controls. Plasma procalcitonin (PCT), C-reactive protein (CRP), and peripheral blood leukocyte subset indicators were measured, and their differential diagnostic efficacy was analyzed. The results showed that PCT, CRP, white blood cell count, and absolute neutrophil count (NE#) were significantly higher in the sepsis group than in the bacterial pneumonia group ( < 0.05). The area under the curve for PCT in differentiating sepsis was 0.85, with an optimal cut-off value of 5.8 ng/mL. The optimal cut-off values for CRP in diagnosing sepsis and bacterial pneumonia were 28.5 mg/L and 20.0 mg/L, respectively, which could help distinguish local from systemic infection. The diagnostic value of NE# was significantly superior to that of the neutrophil percentage (AUC: 0.79 vs. 0.65). The sepsis group also had a longer disease course and a higher proportion of patients with a history of previous hospitalization ( < 0.05). The study confirmed that PCT and CRP have significant differential diagnostic value for pediatric bacterial pneumonia and sepsis, with PCT showing superior efficacy for identifying sepsis. The differentiated CRP cut-off values could reflect infection severity, and NE# was more suitable as an inflammatory assessment indicator in pediatric infections. Combining these biomarkers with clinical features like disease course and prior hospitalization history can guide early and precise clinical differentiation, providing a reference for timely targeted anti-infective therapy.