BACKGROUND: Malaria-endemic countries in sub-Saharan Africa are shifting from the presumptive approach that is based on clinical judgement (CJ) to the test-based approach that is based on confirmation through test with rapid diagnostic tests (RDT). It has been suggested that the loss of the prophylactic effect of presumptive-administered ACT in children who do not have malaria will result in increase in their risk of malaria and anaemia. METHODS AND FINDINGS: We undertook a cluster-randomized controlled trial to compare the effects of the presumptive approach using clinical judgment (CJ-arm) and the test-based approach using RDTs (RDT-arm in a high-transmission setting in Ghana. A total of 3046 eligible children (1527 in the RDT arm and 1519 in the CJ- arm) living around 32 health centres were enrolled. Nearly half were female (48.7%) and 47.8% were below the age of 12 months as at enrolment. Over 24-months, the incidence of all episodes of malaria following the first febrile illness was 0.64 (95% CI 0.49-0.82) and 0.76 (0.63-0.93) per child per year in the RDT and CJ arms respectively (adjusted rate ratio 1.13 (0.82-1.55). After the first episode of febrile illness, the incidence of severe anaemia was the same in both arms (0.11 per child per year) and that of moderate anaemia was 0.16 (0.13-0.21) vs. 0.17 (0.14-0.21) per child year respectively. The incidence of severe febrile illness was 0.15 (0.09, 0.24) in the RDT arm compared to 0.17 (0.11, 0.28) per child per year respectively. The proportion of fever cases receiving ACT was lower in the RDT arm (72% vs 81%; p = 0.02). CONCLUSION: The test-based approach to the management of malaria did not increase the incidence of malaria or anaemia among under-five children in this setting. TRIAL REGISTRATION: ClinicalTrials.gov NCT00832754.