Approximately 11% of children worldwide suffer from moderate or severe acute malnutrition, which is defined as low weight for height or mid-upper arm circumference with respect to international standards, or the presence of bipedal edema. These children have a considerably increased risk of dying. Experience from the past two decades indicates that children with uncomplicated moderate or severe acute malnutrition can be managed successfully as outpatients, by use of appropriate treatment of infections and either lipid-based, ready-to-use therapeutic foods or appropriately formulated home diets, along with psychosocial care. Children's caregivers prefer community-based treatment, which is also less costly than inpatient care. Children with severe acute malnutrition and life-threatening complications require short-term inpatient care for treatment of infections, fluid and electrolyte imbalances, and metabolic abnormalities. Initial dietary management relies on low-lactose, milk-based, liquid formulas but semi-solid or solid foods can be started as soon as appetite permits, after which children can be referred for ambulatory treatment. National programs for the community-based management of acute malnutrition (CMAM) provide periodic anthropometric and clinical screening of young children, and referral of those who meet established criteria. This Review describes the main components of the treatment of young children with acute malnutrition in resource poor settings and some recent advances in CMAM programs.