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The demand for district level statistics has increased tremendously in Bangladesh due to existence of decentralised approach to governance and service provision. The Bangladesh Demographic Health Surveys (BDHS) provide a wide range of invaluable data at the national and divisional level but they cannot be used directly to produce reliable district-level estimates due to insufficient sample sizes. The small area estimation (SAE) technique overcomes the sample size challenges and can produce reliable estimates at the district level. This paper uses SAE approach to generate model-based district-level estimates of diarrhoea prevalence among under-5 children in Bangladesh by linking data from the 2014 BDHS and the 2011 Population Census. The diagnostics measures show that the model-based estimates are precise and representative when compared to the direct survey estimates. Spatial distribution of the precise estimates of diarrhoea prevalence reveals significant inequality at district-level (ranged 1.1–13.4%) with particular emphasis in the coastal and north-eastern districts. Findings of the study might be useful for designing effective policies, interventions and strengthening local-level governance. [ABSTRACT FROM AUTHOR]