We aimed to determine the outcome of nutritional intervention in children with moderate to severe malnutrition following persistent diarrhoea (PD), referred to a tertiary referral unit in Malaysia. Thirty one (44%) of the 71 children (median age 19 months) with PD had moderate to severe malnutrition on admission. Fifty three (75%) required dietary modification and 15 (21%) needed parenteral nutrition (PN, median duration 96 days). Of the 70 patients in whom remission of diarrhoea could be ascertained, 64 (91%) achieved remission. Three required home PN. At three months after discharge, there was a significant improvement in the mean weight for height z-score as compared to the original score at initial presentation (from –1.83 ± 1.77 to –0.80 ± 1.17; p < 0.001), although 12 (22%) of the 55 patients in whom nutritional status could be ascertained still had moderate to severe malnutrition. In conclusion, moderate to severe malnutrition was a common complication following PD resulting from diverse causes. With appropriate therapy, remission can be achieved in majority of patients, although a small number of patients needed home PN because of persistance of diarrhoea.