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Abstract Background Early diagnosis and treatment (EDAT) is crucial to reducing the burden of malaria in low-income countries. In the Lao PDR, this strategy was introduced in 2004-2005 and an assessment was performed at the community level in January 2007. Methods EDAT with malaria rapid diagnostic test (MRDT) and artemisinin combination therapy (ACT) was prospectively assessed among 36 randomized village health volunteers (VHVs) and 720 patients in six malaria-endemic provinces of Laos (three pilot provinces (PP), and three non-pilots provinces (NPP)). ACT was also retrospectively assessed among 2188 patients within the same areas from June to November 2006. Two checklists were used and scores were calculated. Results EDAT performance of the VHVs was rated better in PP than in NPP (16.67% versus 38.89%, respectively, p = 0.004). Nearly all VHVs could diagnose malaria but only 16 (44%) could describe the symptoms of severe malaria. In January 2007, 31/720 (4%) patients tested positive using the Paracheck® test, 35 (5%) with microscopy (sensibility: 74.3%, specificity 99.3%, positive and negative predictive values: 83.9% and 98.7%, respectively). Patients from June to November were at higher risk of malaria: 35.19% of 2,188 febrile patients were positive (OR: 10.6, 95%CI: 7.4-15.5, p < 0.000). VHVs reported the MRDT easy to use, and yielded a satisfactory performance score. EDAT performance was rated as poor despite satisfactory results regarding ACT treatment, duration and dosages. Pre-referral treatment of severe malaria was infrequent and often inadequate, with 20% of these patients dying. Results suggest a higher mortality from severe malaria than officially reported. Shortage of ACT was frequent. Discussion and conclusion MRDT and ACT are useful and efficient and can be used by VHVs. VHVs' global EDAT performance is enhanced through training and monitoring. Persistent gaps in knowledge, care of patients and wrong treatment have to be addressed.