Purpose <p>Residual neuromuscular blockade can impair postoperative respiratory mechanics, promoting hypoxemia and pulmonary complications. Sugammadex, with its unique mechanism of action, may offer a more effective reversal of neuromuscular blockade and respiratory function than neostigmine. We sought to test the primary hypothesis that children undergoing noncardiac surgery exhibit better initial recovery oxygenation when administered sugammadex than those administered neostigmine. Furthermore, we aimed to investigate if children administered sugammadex experience fewer in-hospital pulmonary complications.</p> Methods <p>In a retrospective cohort study, we analyzed data from children aged 2–17&#xa0;yr who underwent noncardiac surgery with general anesthesia and received neostigmine or sugammadex between January 2017 and April 2023 at the Cleveland Clinic Main Campus. Our primary outcome was postoperative oxygenation defined by the mean SpO₂/F_IO₂ ratio during the initial hour in the postanesthesia care unit. The secondary outcome was a composite of postoperative pulmonary complications during the hospital stay.</p> Results <p>Among 3,523 cases, 430 (12.5%) involved sugammadex and 3,081 (87.5%) involved neostigmine. The median [interquartile range] of the mean SpO₂/F_IO₂ ratio during the first postoperative hour was 403 [356–464] in the sugammadex group and 408 [357–462] in the neostigmine group, resulting in an estimated difference in means of −6.2 (95% confidence interval, −12.8 to 0.41; <i>P</i> = 0.07) after inverse probability of treatment weighting. Overall, 22/1,916 (1.1%) inpatients experienced postoperative pulmonary complications; 2.0% of patients given sugammadex and 1.0% of patients administered neostigmine developed postoperative pulmonary complications (<i>P</i> = 0.19).</p> Conclusion <p>In this retrospective cohort study, postoperative oxygenation was similar in children after reversal of neuromuscular blockade with sugammadex <i>versus</i> neostigmine.</p>