We studied changes in species distribution and antimicrobial resistance patterns of Shigella during 1980-2008, using the Diarrhoeal Diseases Surveillance system of Dhaka Hospital of ICDDR,B. In hospitalized patients Shigella prevalence decreased steadily from 8-12% in the 1980s to 3% in 2008. Endemic S. flexneri was the most commonly isolated species (54%). Epidemic S. dysenteriae type 1 had two peaks in 1984 and 1993, but was not found after 2000, except for one case in 2004. The therapeutic options are now limited: in 2008 a total of 33% of S. flexneri were resistant to ciprofloxacin and 57% to mecillinam. In the <5 years age group, severely underweight, wasted and stunted children were more at risk of shigellosis compared to well-nourished children (P<0·001). Although hospitalization for Shigella diarrhoea is decreasing, the high levels of antimicrobial resistance and increased susceptibility of malnourished children continue to pose an ongoing risk.