Play is an integral aspect of a child's growth and development and is an important part of their daily lives. Toys are the “tools” of play that provide a child with a more “natural” atmosphere. Toys that are chosen and used properly will help to minimize the stressful impact of hospitalization and assist in the healing process of illness.1 Objectives: To Assess the Anxiety Level among Hospitalized Children. To Assess the Effectiveness of Instructional Play Therapy in Reducing Anxiety Level among Hospitalized Children. To associate the findings with selected demographic variables. Material and Methods: Research approach used for this study was an evaluative approach with one group pretest and posttest design, Population was Hospitalized Children in age group of 3 to 6 Years. Total 60 samples (Table1) were selected by using non-probability Convenient sampling technique. Result: The mean Anxiety Level in Pretest was 1.58 and in posttest was 2.67. The tabulated ‘t’ value was 2 (df=59) which is less than the calculated’ i.e. 13.00 at 5% level of significance.3 Also, the calculated ‘p’=0.0001 which was much less than the acceptable level of significance i.e. ‘p’=0.05. Hence it is interpreted that there is significant difference in Anxiety Level at pre and posttest among Hospitalized Children.(Table 2) There was no association found between Age, Gender, Birth Order, Number of days of hospitalization, Type of family. Conclusion: The Instructional Play Therapy in Reducing Anxiety Level among Hospitalized Children was effective. Keywords: Instructional Play Therapy; Anxiety; Hospitalized Children.