The malaria incidence and prevalence rates among children who slept under permethrin-impregnated mosquito nets in four villages near Madang, Papua New Guinea, were compared with the rates among children who slept under unimpregnated nets in four paired control villages. Immediately following a parasitological survey in the eight villages, malaria parasites were cleared from the children with chemotherapy, and the mosquito nets in the four experimental villages were impregnated with permethrin. Follow-up parasitological surveys were performed 4 and 10 weeks later. Sporozoite rates in female mosquitos of the Anopheles punctulatus complex decreased significantly in two of the experimental villages after impregnation. Also, the incidence of Plasmodium falciparum between the 4-week and 10-week surveys was significantly lower among the 0-4-year olds in villages with impregnated nets than in those with unimpregnated nets, leading to reduced prevalence of P. falciparum in this age group. Use of permethrin-impregnated nets had no effect on the incidence or prevalence of P. falciparum among 5-9-year olds or on that of P. vivax among the 0-4- or 5-9-year olds.