The association between maternal smoking and adverse child health outcomes has not been systematically explored in less developed countries, especially in Nepal where over a quarter of women of reproductive age smoke tobacco products. This study aims to quantify the effect of maternal smoking on acute respiratory infection (ARI) symptoms among children aged below five years, using the 2001 Nepal Demographic and Health Survey. It is hypothesized that children born to mothers who smoke frequently are at higher risk of developing ARI symptoms. Four-level random intercept logistic regression models were used to disentangle the independent effect of maternal smoking on children's ARI symptoms, controlling for potential biological, socioeconomic, seasonal and spatial variables. Maternal smoking status had a significant effect on children's ARI symptoms; the effects were significantly higher (adjusted OR 1.41; 95% CI 1.02–1.96) among those born to mothers who smoked more frequently than their counterparts. Furthermore, a strong spatial pattern was evident in the prevalence of ARI symptoms, after adjusting for maternal smoking and relevant control variables. The findings underscore the importance of designing exclusive public health intervention measures to prevent tobacco smoking within households, for example through awareness campaigns highlighting the adverse effect of maternal smoking on child health.