OBJECTIVE: To compare the performance of the Paracheck™ rapid diagnostic test (RDT) with microscopy for diagnosing malaria in hospitalised children. METHODS: Children aged between 2 months and 13 years with fever were enrolled in the study over 1 year. A standard clinical history and examination were recorded and blood drawn for culture, complete blood count, Paracheck™ RDT and double-read blood slide. RESULTS: Of 3639 children enrolled, 2195 (60.3%) were slide positive. The sensitivity and specificity of Paracheck were 97.5% (95% CI 96.9-98.0) and 65.3% (95% CI 63.8-66.9), respectively. There was an inverse relationship between age-specific prevalence of parasitaemia and Paracheck specificity. In logistic regression model, false-positive Paracheck results were significantly associated with pre-admission use of antimalarial drug (OR 1.44, 95% CI 1.16-1.78), absence of current fever (OR 0.64, 95% CI 0.52-0.79) and non-typhi Salmonella bacteraemia (OR 3.89. 95% CI 2.27-6.63). In spite of high sensitivity, 56/2195 (2.6%) of true infections were Paracheck negative and 8/56 (14.3%) were in patients with >50,000 parasites/μl. CONCLUSIONS: Paracheck had poor specificity in diagnosing malaria in severely ill children; this was likely to be due to HRP2 persistence following recent parasite clearance. The combination of positive Paracheck and negative blood slide results identified a group of children at high risk of non-typhi Salmonella infection. While Paracheck was highly sensitive, some high-density infections were missed. For children with severe febrile illness, at least two reliable negative parasitological test results should be available to justify withholding antimalarial treatment; the optimal choice of these has yet to be identified.