OBJECTIVE To identify factors for development of dehydration in under five year olds with acute watery diarrhoea. METHODS Hospital based unmatched case-control study. METHODS Diarrhoea Treatment Unit, Government Medical College Hospital, Nagpur, India. METHODS The study included 387 cases of diarrhoea having severe or moderate dehydration and 387 controls suffering from diarrhea with mild or no dehydration. METHODS The study included infancy, female sex, religion, residing in urban slums or rural area, under nutrition, cessation of breast feeding during diarrhoeal episode, fluid intake decrease/stopped during diarrhoea, ORS not received, home available funds (HAF) not received, both ORS and HAF not received, non-washing of hands by mother before preparation of food, after defaecation, after disposal of faeces, history of measles in the previous six months, frequency of stools > 8/d, frequency of vomiting more than twice per day and temperature more than 99 degrees F, as risk factors for development of dehydration. METHODS Univariate analysis included OR, 95% CI for OR and Chi-square test. Multivariate analysis was carried out by unconditional multiple logistic regression (MLR). RESULTS This study identified the significance of infancy, religion, severe undernutrition, non-washing of hands by mother before preparation of food, frequency of stool > 8/d, frequency of vomiting > 2/d, history of measles in previous six months, withdrawal of breast feeding during diarrhoea, withdrawal of fluids during diarrhoea and not giving ORS, HAF or both during diarrhoea, in the outcome of development of moderate or severe dehydration. CONCLUSIONS Timely intervention in the preventable risk factors included in this study may prevent the development of moderate or severe dehydration in the children suffering form acute watery diarrhoea.