Domiciliary treatment of severely malnourished children could have economic and practical advantages over other methods.

We compared three approaches in a controlled trial, 437 children in Dhaka (<60% weight-for-height, and/or oedema) aged 12-60 months were sequentially allocated to treatment as inpatients, to day-care, or to care at home after one week of day-care.

Institutional and parental costs incurred to reach 80% weight-for-height were compared.

Costs for inpatient, day-care, and at-home groups averaged 6363,2517, and 1552 taka (60 taka=UK£1).

Mortality was low (<5%) in all three groups.

Day-care treatment approached inpatient care for speed of recovery at less than half the cost, but it was unpopular with parents.