This study aimed to evaluate the medium-term effects that hospitalization in the first 48 months of life has on the development of psychiatric disorders at 6 and 11 years of age among individuals in a birth cohort in a middle-income country. We analyzed data from a 2004 birth cohort (N = 4,231) in the city of Pelotas, Rio Grande do Sul State, Brazil. The frequency of hospitalization was investigated at 12, 24 and 48 months of life. When the children were 6 and 11 years old, psychiatric disorders were investigated with the Development and Well-Being Assessment. We used logistic regression to adjust for potential confounders. The overall frequency of hospitalization during the first 48 months of life was 33.1% (95%CI: 31.4; 34.7). Among the hospitalized children 25.6% (95%CI: 24.1; 27.1), 4.7% (95%CI: 4.0; 5.5) and 2.8% (95%CI: 2.3; 3.5) were hospitalized 1, 2 or ≥ 3 times during this period, respectively. After adjustment for potential confounders, the chance of presenting any psychiatric disorder at 6 and 11 years of age was higher for the children who had been hospitalized during the first 48 months of life than for those who had not, with OR of 1.50 (95%CI: 1.19; 1.88) and 1.63 (95%CI: 1.28; 2.07), respectively. Our results support the hypothesis that hospitalization in the early stages of life has an effect on the subsequent mental health of children. Preventive measures are needed in order to minimize the negative experiences of children who are hospitalized during infancy.