Ulaanbaatar topped New Delhi and Beijing as the world's most polluted capital in 2016, UNICEF said in a report warning of a health crisis that has put every child and pregnancy at risk.
With residents of so-called ger (slum) districts using coal stoves to cook and heat their homes in the world's coldest capital, where temperatures can dip as low as -40 Celsius (-40 Fahrenheit), pollution has skyrocketed.
While most of the pollution comes from stoves in the gers, road transport and power plants add to the toxic mix.
On January 30, air pollution was 133 times higher than the safe limit set by the World Health Organization (WHO). UNICEF reported that cases of respiratory infections have nearly tripled and pneumonia is now the second leading cause of death for children under five.
Worried parents have held protests to press the government to take action.
But some businesses are cashing in, even though a WHO official says there is no evidence that such anti-smog products work.
Advertisements in Mongolia boast that "drinking just one oxygen cocktail is equal to a three-hour-walk in a lush forest".
At the produce section of the State Department Store, blue cans of oxygen called "Life Is Air" are on sale for $2, and promise to turn a glass of juice into a foamy, sweet "oxygen cocktail" after spraying some into a glass through a special straw.
Other stores and pharmacies have oxygen cocktail machines that resemble coffee makers and can turn a juice into a frothy drink for $1.
Pregnant women are among the most avid customers of the Russian-made product, with some saying they are following their doctor's orders.
Batbayar Munguntuul, a 34-year-old accountant and mother of three, drank oxygen cocktails when she was pregnant, but she ended up spending much more money on medicine.
"Every winter we constantly buy medicine," she told AFP. "It has reached a point that it is like just any other grocery product that you have to buy regularly."
Like many other Mongolians, she has chosen to buy an air purifier to make sure her family breathes clean air at home. Her machine, which filters out toxic fumes, cost her $300.
The average level of PM2.5 particles -- which penetrate deep into the lungs -- was 75 micrograms per cubic metre last year, or three times the exposure recommended by the WHO for a 24-hour period.