In Lesotho prior to 1986, diarrhoea was the leading cause of hospital mortality in children less than 5 years of age. At the Queen Elizabeth II Hospital, diarrhoea-related admissions as a proportion of all admissions in children less than 5 years of age declined from 23% in the year prior to the opening of the Oral Rehydration Therapy Unit (ORTU) to 13% in the first nine months of 1987 (p less than 0.05). In addition, the case-fatality ratio of children treated in the ORTU declined from 1.4% in the first quarter of 1986 to zero in the second and third quarters of 1987 (p less than 0.05). In a case-control study conducted to identify reasons for children failing ORTU treatment, factors associated with an increased risk of hospitalization included male gender (odds ratio [OR] = 4.9; 95% confidence limits [CL] = 2.0, 11.9), fever greater than or equal to 38.5 degrees C (OR = 2.0; CL = 1.2, 3.3), undernutrition (OR = 3.2; CL = 1.1, 9.4), and moderate dehydration (OR = 2.3; CL = 1.2, 4.4) or severe dehydration. (OR = 12.1; CL = 3.8, 38.5). Breastfed children less than 2 years of age were at decreased risk of hospitalization (OR = 0.4; CL = 0.2, 0.7). At this major hospital in Lesotho, the standardization of outpatient treatment for diarrhoea with oral rehydration salts (ORS) in the context of an ORTU resulted in a marked decrease in diarrhoea-associated hospitalization and deaths in children less than 5 years of age.