To assess the effectiveness on child growth and body composition of a supplementary feeding program (Milk Supplement Program), a prospective, controlled study was conducted in Northeast Brazil. When entering the Program, children from 10 municipalities with the highest coverage rates in the Program (intervention group) were compared to non-beneficiary children from 10 municipalities with the lowest coverage rates (control group). A total of 219 children aged 6-18 months were enrolled. At entry, both groups were comparable in terms of age, sex, and nutritional status. There were frequent gaps in delivery of the supplement, no extra milk was provided to siblings less than 5 years of age, intra-household redistribution of milk was high, and maternal compliance with recommendations was low. Adjusted analyses by multilevel modelling showed average changes in weight, length, weight-age and length-age Z-scores, and % body water (deuterium method), at 6 months, of 1.53 kg, 6.34 cm, 0.33, 0.05, and 1.11% respectively among supplemented children as compared to 1.54 kg, 6.5 cm, 0.26, 0.07, and 4.10% among controls, with no statistically significant difference between groups. Thus, the Program failed to compensate for nutritional deficiencies in undernourished children in Northeast Brazil.