In malaria endemic areas anaemia is a usually silent condition that nevertheless places a considerable burden on health services. Cases of severe anaemia often require hospitalization and blood transfusions. The objective of this study was to assess risk factors for admission with anaemia to facilitate the design of anaemia control programmes. We conducted a prospective case–control study of children aged 2–59 months admitted to a district hospital in southern Tanzania. There were 216 cases of severe anaemia [packed cell volume (PCV) < 25%] and 234 age-matched controls (PCV ≥ 25%). Most cases [55.6% (n = 120)] were < 1 year of age. Anaemia was significantly associated with the educational level of parents, type of accommodation, health-seeking behaviour, the child's nutritional status and recent and current medical history. Of these, the single most important factor was Plasmodium falciparum parasitaemia [OR 4.3, 95% confidence interval (CI) 2.9–6.5, P < 0.001]. Multivariate analysis showed that increased recent health expenditure [OR 2.2 (95% CI 1.3–3.9), P = 0.005], malnutrition [OR 2.4 (95%CI 1.3–4.3), P < 0.001], living > 10 km from the hospital [OR 3.0 (95% CI 1.9–4.9), P < 0.001], a history of previous blood transfusion [OR 3.8 (95% CI 1.7–9.1), P < 0.001] and P. falciparum parasitaemia [OR 9.5 (95% CI 4.3–21.3), P < 0.001] were independently related to risk of being admitted with anaemia. These findings are considered in terms of the pathophysiological pathway leading to anaemia. The concentration of anaemia in infants and problems of access to health services and adequate case management underline the need for targeted preventive strategies for anaemia control.