Youngsters exposed to second-hand smoke were 45% more likely to need hospital treatment for an infection by the age of eight.
And one in three who had someone smoking within 3m (10ft) of them while they were only a few months old ended up in hospital.
The children could get infections which cause diseases such as meningitis, as well as respiratory diseases, the research suggested.
“An excess risk of severe morbidity for all infants exposed to second-hand smoke suggests exposure may also affect the immune system,” added the report.
People who breathe in someone else’s smoke are at risk of the same diseases as the smoker.
Children, whose bodies are still developing, are particularly vulnerable, research shows. Those with a low birth weight were 75% more likely to need hospital treatment for meningitis and septicaemia-causing infectious diseases than other infants.
The risk to premature babies was doubled, the researchers from Hong Kong claimed.
More than 7,000 children born in April and May 1997 were followed for the study, published by Tobacco Control.