Tuberculosis preventive therapy reduces tuberculosis risk in children. However, the effectiveness of tuberculosis preventive therapy in children living in high burden settings is unclear.In a prospective observational community-based cohort study in Cape Town, South Africa, we assessed the effectiveness of routine tuberculosis preventive therapy in children ≤15 years of age in a tuberculosis and HIV high-prevalence setting.Among 966 children (median age 5.07 years; inter-quartile range [IQR] 2.52,8.72), 676 (70%) reported exposure to an adult with tuberculosis in the past 3 months and 240/326 (74%) of eligible children initiated isoniazid preventive therapy (IPT) under programmatic guidelines. Prevalent (n=73) and incident (n=27) tuberculosis were diagnosed among 100/966 (10%) of children. Children who initiated IPT were 82% less likely to develop incident tuberculosis than children who did not (aOR=0.18; 95% confidence-interval [CI] 0.06,0.52; p=0.0014). Children's risk of incident tuberculosis increased if they were younger than 5 years, living with HIV, had a positive M.tuberculosis specific immune response, or recent tuberculosis exposure. The risk of incident tuberculosis was not associated with gender or M. bovis-BCG vaccination status. Number needed to treat (NNT) was lowest in children living with HIV (NNT=15) and children less than 5 years of age (NNT=19) compared to children of all ages (NNT=82).In communities with high tuberculosis prevalence, tuberculosis preventive therapy substantially reduces the risk of tuberculosis among children who are younger than 5 years or living with HIV, especially those with recent tuberculosis exposure or a positive M.tuberculosis specific immune response in the absence of disease (Mtb-sir-nodis).