Background: Ketamine is widely used in infants and young children for procedural sedation and anesthesia. The aim of this study was to evaluate the efficacy and safety of low dose oral ketamine to control pain and distress in children during intravenous (IV) cannulation. Methods: This is a prospective, randomized, double-blind study, including children aged between 3 and 6 years requiring a non-emergent IV-line placement. Children were randomly assigned to two groups, treated either with oral ketamine or a placebo. All patients were monitored for vital signs. Pain was assessed using the Children’s Hospital of Eastern Ontario Pain Scale (CHEOPS) and Wong-Baker Faces Pain Rating Scale (WBFS) scales and sedation using a 5-point sedation score. The facility of IV-line placement was measured by a 3-point scale. Adverse effects were recorded after 1 and 24 hours. Results: A total of 79 and 81 children were entered in the ketamine and placebo groups, respectively. The heart and respiratory rates increased significantly in the placebo group. The median CHEOPS 4 (95% confidence interval [CI]: 3, 4, P < 0.001) and WBFS 6 (95% CI: 4, 6, P < 0.001) scores decreased statistically in the ketamine group. IV-line placement was 50% easier in the ketamine group (95% CI: 37%, 63%, P < 0.001). No serious adverse effects were observed in all cases. Conclusions Low dose oral ketamine effectively decreased the pain and distress during IV cannulation in children without any significant adverse reactions.