OBJECTIVE To compare the clinical efficacy of hypo-osmolar oral rehydration salt (ORS) solution (224 mmol/l) and standard ORS solution (311 mmol/l) in severely malnourished (marasmic) children having less than 60% Harvard standard weight for age with dehydrating acute watery diarrhoea. METHODS In a double blind, randomised, controlled trial, 64 children aged 6-48 months were randomly assigned standard (n = 32) or hypo-osmolar ORS (n = 32). RESULTS Stool output (52.3 v 96.6 g/kg/day), duration of diarrhoea (41.5 v 66.4 hours), intake of ORS (111.5 v 168.9 ml/kg/day), and fluid intake (214.6 v 278.3 ml/kg/day) were significantly less in the hypo-osmolar group than in the standard ORS group. Percentage of weight gain on recovery in the hypo-osmolar group was also significantly less (4.3 v 5.4% of admission weight) than in the standard ORS group. A total of 29 (91%) children in the standard ORS group and 32 (100%) children in the hypo-osmolar group recovered within five days of initiation of therapy. Mean serum sodium and potassium concentrations on recovery were within the normal range in both groups. CONCLUSIONS Our findings suggest that hypo-osmolar ORS has beneficial effects on the clinical course of dehydrating acute watery diarrhoea in severely malnourished (marasmic) children. Furthermore, children did not become hyponatraemic after receiving hypo-osmolar ORS.