Because of increasing resistance to 4-aminoquinolines in Papua New Guinea, combination therapy of amodiaquine (AQ) or chloroquine (CQ) plus sulfadoxine-pyrimethamine (SP) was introduced as first-line treatment against uncomplicated malaria in 2000. The purpose of this study was to monitor in vivo efficacy of the current standard combination therapy against Plasmodium falciparum and P. vivax malaria. Studies were conducted between 2003 and 2005 in the Simbu, East Sepik, and Madang Provinces in Papua New Guinea according to the revised protocol of the World Health Organization (WHO) for assessment of antimalarial drug efficacy. Children between six months and seven years of age with clinically overt and parasitologically confirmed P. falciparum or P. vivax malaria were treated according to the new policy guidelines (i.e., AQ plus SP given to patients weighing < 14 kg and CQ plus SP given to patients weighing < 14 kg). Children were monitored up to day 28 and classified according to clinical and parasitological outcome as adequate clinical and parasitological response (ACPR), early treatment failure (ETF), late clinical failure (LCF), or late parasitological failure (LPF). For P. falciparum malaria, polymerase chain reaction (PCR)-corrected treatment failure rates up to day 28 ranged between 10.3% and 28.8% for AQ plus SP and between 5.6% and 28.6% for CQ plus SP, depending on the region and the year of assessment. Overall treatment failure rate with AQ or CQ plus SP for P. vivax malaria was 12%. Our results suggest that the current first-line treatment in Papua New Guinea is not sufficiently effective. According to the new WHO guidelines for the treatment of malaria, a rate of parasitological resistance greater than 10% in the two dominant malaria species in the country justifies a change in treatment policy.