Children aged 4-23 months with persistent diarrhoea received a low lactose diet, multivitamins, minerals and antibiotics for infection. Sixty-one (57 per cent) children improved with low lactose diet while 46 (43 per cent) failed. Children who failed were younger (8.9 +/- 3.5 vs. 11.3 +/- 4.4 months), had higher initial purging rate (146 +/- 102 vs. 109 +/- 102 g/kg/day) and consumed more ORS (138 +/- 77 vs. 95 +/- 79 g/kg/day). A higher proportion of children in the failure group needed unscheduled intravenous fluid (48 vs. 20 per cent) and lost body weight (24 vs. 0 per cent). Single and multiple stool pathogen were isolated from 44 and 45 per cent cases, respectively. Diarrhoeagenic Escherichia coli (66 per cent) was the most common pathogen isolated. Half of all pathogens including Campylobacter, rotavirus, cholera and non-typhoidal Salmonella were nosocomially acquired. Sixty four per cent of children had extraintestinal infections including acute lower respiratory infection (50 per cent), urinary tract infection (29 per cent) and septicaemia (11 per cent). The presence of extraintestinal infections were significantly associated with failure. Overall, 91 per cent of children had either intestinal and/or extraintestinal infections.