OBJECTIVE: To compare the efficacy of atovaquone-proguanil (AP) and sulphadoxine-pyrimethamine (SP) in the treatment of malarial anaemia in Zambian children. METHODS: An individually randomised, double-blind, controlled trial was undertaken in Zambian children with moderately severe anaemia and Plasmodium falciparum parasitaemia. The main trial endpoint was treatment failure defined as a need for blood transfusion or treatment with quinine, persistent anaemia or death within 14 days from the start of treatment. Secondary endpoints were parasitological and haematological findings 14 or 28 days after the start of treatment. RESULTS: A total of 128 children with a packed cell volume of <21% and >9% and P. falciparum parasitaemia received treatment with AP and 127 treatment with SP. Treatment failure occurred in 28 children (22%) who received SP and in 10 (8%) who received AP (OR: 3.34, 95% CI: 1.54, 7.21). Ten children required blood transfusion, all of whom were in the SP treatment group. Six children died, five of whom were in the AP group; none of the deaths were considered to be related directly to treatment. CONCLUSIONS: Atovaquone-proguanil proved more effective than SP in the treatment of malarial anaemia in an area with a modest level of SP resistance. AP is no longer available through the Malarone Donation Programme and is too expensive for routine use in Africa. However, this study has shown that in an area with a modest level of resistance to SP, use of a more effective antimalaria reduces the need for blood transfusion in children with malarial anaemia.