Four fire crews were called to the hospital's Children's Pavilion after staff noticed smoke filling a room on the third floor.
Senior Station Officer Justin Wafer, of Dunedin Central, said the smoke had come from a light fitting in the ceiling, and it was quickly brought under control.
Mr Wafer praised the swift action of the hospital staff who set off the manual smoke alarm, which meant firefighters arrived within minutes.
The third floor was evacuated but people were allowed back shortly afterwards.
The cause of the smoke has not yet been determined.