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Growing evidence suggests that household sanitation is associated with child nutritional status in low‐ and middle‐income countries. This paper examined whether household access to improved sanitation facilities and sources of drinking water was associated with stunting and anaemia amongst children aged 6–35 months of age in Indonesia. The sample for the analysis comprised 1,450 children aged 6–35 months who participated in the end‐line survey of the maternal and young child nutrition security project in Asia, conducted in three selected districts in Indonesia. Logistic regression models were used to determine the association between household sanitation and water source, and stunting and anaemia. Approximately 26% and 56% of children 6–35 months of age were stunted and anaemic, respectively. Children living in a household with improved sanitation facilities had 29% reduced odds of being stunted compared with those in a household with unimproved sanitation facilities, after adjusting for potential confounders including child's age and gender, maternal education, and iron–folic acid supplementation, as well as household wealth status and source of drinking water (OR = 0.68, 95% CI:0.48–0.96). No association between household sanitation and childhood anaemia was observed. Source of drinking water was not associated with stunting or anaemia amongst children. There were no synergistic effects of household sanitation and water supply on stunting and anaemia. This suggests that efforts to improve household sanitation condition may need to be considered an essential, integral part of the programmatic responses by governments and development partners for the prevention of childhood nutritional status. Further randomised research is necessary to determine the causal link. [ABSTRACT FROM AUTHOR]