Background Health service use may be influenced by multilevel predisposing, enabling, and need factors but is equitable when driven by need. The study's objectives were as follows: (a) to investigate residential context's effect on child health service use and (b) to examine inequity of child health service use by testing for effect measure modification of need factors. Methods The sample of 1,451 children was from a prenatal cohort recruited from London, Ontario, between 2002 and 2004, with follow‐up until children were toddler/preschooler‐aged. Individual‐level data were linked by residential address to neighbourhood contextual‐level data sourced from Statistics Canada. Multilevel logistic regression modelled factors associated with child health service use. Interaction terms were included in the model to test for effect measure modification of need factors by predisposing and enabling factors. Results Contextual‐level factors were not associated with child health service use. Maternal parity and nativity to Canada modified the effect of the need factor, paediatric health condition, on health service use. Health condition's effect was lowest in children of Canadian‐born mothers with one child only (OR = 1.58, p = .04) and highest in children of Canadian‐born mothers with three or more children (OR = 3.52, p < .01). Further, its effect was higher in children of Canadian‐born mothers compared to children of mothers who migrated to Canada; however, odds ratios were not statistically significant for the latter. Conclusions Results may inform future investigation of the potential inequity of health service use for subgroups of children whose mothers are of lower parity and not Canadian‐born. An understanding of these inequities may inform future healthcare policy and care for paediatric populations. Key Messages A novel method to analytically assess inequity in health service use was explored. The effect of children's health condition on health service use depended on maternal parity and nativity to Canada. Child health service use did not vary by the neighbourhood in which children resided. Healthcare policy could benefit from further investigation of the observed inequities.