We evaluated factors associated with mortality among a cohort of malnourished children with persistent diarrhoea (PD) admitted for nutritional rehabilitation with a defined rice-lentil (Khitchri) and yoghurt diet. Of 302 children consecutively admitted with PD, 13 (4 per cent) died, mostly (62 per cent) within 72 h of admission. Univariate analysis of risk factors at admission associated with mortality indicated significantly increased risk of death with severe stunting [relative risk (RR) 3.1, 95 per cent confidence interval (CI) 1.1-9.0], hypoalbuminaemia (RR 4.3, 95 per cent CI 1.5-12.3), stool frequency > 12/day (RR 6.0, 96 per cent CI 2.0-17.6), stool volume > 100 g/kg/day (RR 10.7, 95 per cent CI 3.0-37.6) and severe dehydration (RR 7.5, 95 per cent CI 2.6-21.8). Children who died also had comparatively shorter duration of diarrhoea at admission, and were also associated with higher rate of bacteremia at admission (Fisher's exact test P < 0.01). The logistic regression model evaluating multivariate risk of mortality identified weight-for-age z-score and sepsis as significant risk factors. Our data suggest that severe malnutrition and sepsis are associated with significantly increased risk of mortality in children with PD. Stringent screening for infections and recognition of subgroups with severe malnutrition and severe diarrhoea may improve screening and case management strategies for this disorder.