Evidence of associations between exposure to ambient air pollution and health outcomes are sparse in the South Asian region due to limited air pollution exposure and quality health data. This study investigated the potential impacts of ambient particulate matter (PM) on respiratory disease hospitalization in Kandy, Sri Lanka for the year 2019. The Generalized Additive Model (GAM) was applied to estimate the short-term effect of ambient PM on respiratory disease hospitalization. As the second analysis, respiratory disease hospitalizations during two distinct air pollution periods were analyzed. Each 10 μg/m3 increase in same-day exposure to PM2.5 and PM10 was associated with an increased risk of respiratory disease hospitalization by 1.95% (0.25, 3.67) and 1.63% (0.16, 3.12), respectively. The effect of PM2.5 or PM10 on asthma hospitalizations were 4.67% (1.23, 8.23) and 4.04% (1.06, 7.11), respectively (p < 0.05). The 65+ years age group had a higher risk associated with PM2.5 and PM10 exposure and hospital admissions for all respiratory diseases on the same day (2.74% and 2.28%, respectively). Compared to the lower ambient air pollution period, higher increased hospital admissions were observed among those aged above 65 years, males, and COPD and pneumonia hospital admissions during the high ambient air pollution period. Active efforts are crucial to improve ambient air quality in this region to reduce the health effects.