To determine the importance of persistent diarrhea in childhood mortality a multiple-step verbal autopsy method was used to study 1934 deaths in Matlab, Bangladesh. We found that most of the deaths from acute watery diarrhea occurred in infancy, whereas the peak of non-watery diarrhea deaths was in children over 12 months of age. Children suffering from persistent diarrhea and malnutrition were at highest risk of dying during their third year of life. Children with infectious diseases have a two to four times higher risk of dying if they are malnourished, and for diarrhea the risk is 17 times as high. Forty-nine percent of the diarrheal deaths were in children with malnutrition associated with persistent diarrhea. These results imply that fluid and dietary management are key aspects in the treatment of diarrhea, particularly for those episodes which persist. We conclude that attempts to reduce diarrhoeal deaths with vertical ORT programmes will not have major impact unless other interventions are directed to the persistent diarrhoea-malnutrition complex.