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<b>Background/Objectives</b>: Artificial intelligence (AI) and machine learning (ML) are transforming healthcare by enabling predictive, diagnostic, and therapeutic advancements. Pediatric healthcare presents unique challenges, including limited data availability, developmental variability, and ethical considerations. This narrative review explores the current trends, applications, challenges, and future directions of ML in pediatric healthcare. <b>Methods</b>: A systematic search of the PubMed database was conducted using the query: ("artificial intelligence" OR "machine learning") AND ("pediatric" OR "paediatric"). Studies were reviewed to identify key themes, methodologies, applications, and challenges. Gaps in the research and ethical considerations were also analyzed to propose future research directions. <b>Results</b>: ML has demonstrated promise in diagnostic support, prognostic modeling, and therapeutic planning for pediatric patients. Applications include the early detection of conditions like sepsis, improved diagnostic imaging, and personalized treatment strategies for chronic conditions such as epilepsy and Crohn's disease. However, challenges such as data limitations, ethical concerns, and lack of model generalizability remain significant barriers. Emerging techniques, including federated learning and explainable AI (XAI), offer potential solutions. Despite these advancements, research gaps persist in data diversity, model interpretability, and ethical frameworks. <b>Conclusions</b>: ML offers transformative potential in pediatric healthcare by addressing diagnostic, prognostic, and therapeutic challenges. While advancements highlight its promise, overcoming barriers such as data limitations, ethical concerns, and model trustworthiness is essential for its broader adoption. Future efforts should focus on enhancing data diversity, developing standardized ethical guidelines, and improving model transparency to ensure equitable and effective implementation in pediatric care.