Objective: To explore the predictors and outcome of hypoxaemia in children under 5 years of age who were hospitalized for the management of diarrhoea in Dhaka, where comorbidities are common., Methods: In a prospective cohort study, we enrolled all children <5 years of age admitted to the special care ward (SCW) of the Dhaka Hospital of ICDDR,B from September to December 2007. Those who presented with hypoxaemia (SpO(2) < 90%) constituted the study group, and those without hypoxaemia formed the comparison group., Results: A total of 258 children were enrolled, all had diarrhoea. Of the total, 198 (77%) had pneumonia and 106 (41%) had severe malnutrition (<-3 Z-score of weight for age of the median of the National Centre for Health Statistics), 119 (46%) had hypoxaemia and 138 children did not have hypoxaemia at the time of admission. Children with hypoxaemia had a higher probability of a fatal outcome (21%vs. 4%; P < 0.001). Using logistic regression analysis, the independent predictors of hypoxaemia at the time of presentation were lower chest wall indrawing [OR 6.91, 95% confidence intervals (CI) 3.66-13.08, P < 0.001], nasal flaring (OR 3.22, 95% CI 1.45-7.17, P = 0.004) and severe sepsis (OR 4.48, 95% CI 1.62-12.42, P = 0.004)., Conclusion: In this seriously ill population of children with diarrhoea and comorbidities, hypoxaemia was associated with high case-fatality rates. Independent clinical predictors of hypoxaemia in this population, identifiable at the time of admission, were lower chest wall indrawing, nasal flaring and the clinical syndrome of severe sepsis., (© 2011 Blackwell Publishing Ltd.)