BACKGROUND: Malnutrition has various adverse effects in children. This study aimed to determine risk factors for malnutrition among hospitalised children, changes in nutritional status at admission and discharge and effects of use of systematic anthropometric measurement in identification of malnutrition. METHODS: We enrolled 426 children, aged between 6 months and 15 years, admitted to Siddhi Memorial Hospital, Bhaktapur, Nepal, from November 2016 to June 2017. Anthropometric measurements were performed at the time of admission and discharge. Risk factors were assessed by multivariable logistic regression models. RESULTS: Median age of children was 26 months (IQR: 13-49), and males were 58.7%. The prevalence of wasting was 9.2% (39/426) at admission and 8.5% (36/426) at discharge. Risk factors associated with wasting at admission were ethnic minority (aOR: 3.6, 95% CI 1.2-10.8), diarrhoeal diseases (aOR = 4.0; 95% CI 1.3-11.8), respiratory diseases (aOR: 3.4, 95% CI 1.4-8.1) and earthquake damage to house (aOR = 2.6; 95% CI 1.1-6.3). Clinical observation by care providers identified only 2 out of 112 malnutrition cases at admission and 4 out of 119 cases at discharge that were detected by the systematic anthropometric measurement. CONCLUSIONS: Ethnic minority, diarrhoeal diseases, respiratory infections and house damage due to the earthquake were risk factors associated with wasting. Systematic anthropometric examination can identify significantly more malnourished children than simple observation of care providers.