Randomized controlled trials have shown that insecticide-treated nets (ITNs) have an impact on both malaria morbidity and mortality. Uniformly high coverage of ITNs characterized these trials and this resulted in some protection of nearby non-users of ITNs. We have now assessed the coverage, distribution pattern and resultant spatial effects in one village in Tanzania where ITNs were distributed in a social marketing programme. The prevalence of parasitaemia, mild anaemia (Hb <11 g/dl) and moderate/severe anaemia (Hb <8 g/dl) in children under five was assessed cross-sectionally. Data on ownership of ITNs were collected and inhabitants’ houses were mapped. One year after the start of the social marketing programme, 52% of the children were using a net which had been treated at least once. The ITNs were rather homogeneously distributed throughout the village at an average density of about 118 ITNs per thousand population. There was no evidence of a pattern in the distribution of parasitaemia and anaemia cases, but children living in areas of moderately high ITN coverage were about half as likely to have moderate/severe anaemia (OR 0.5, 95% CI: 0.2, 0.9) and had lower prevalence of splenomegaly, irrespective of their net use. No protective effects of coverage were found for prevalence of mild anaemia nor for parasitaemia. The use of untreated nets had neither coverage nor short distance effects. More efforts should be made to ensure high coverage in ITNs programmes to achieve maximum benefit.