The Scotland Chikwawa Health Initiative (SCHI) is carrying out health interventions aimed at achieving measurable results in major causes of disease and death in four villages in Chikwawa, a southern district in Malawi. A baseline survey was carried out in July 2006 in which, among other areas of interest, diarrhoea risks, water sources and use, sanitation and hygiene practices were investigated. This paper analyses domestic water sources, sanitation, and hygiene practice and their impact on child diarrhoea. 97% of the households reported having access to improved water supply surpassing the Millennium Development Goals (MDGs) of 70% by 2015. In contrast, only 48% reported having access to improved sanitation thus lagging behind the MDGs targets of 74% by 2015. A Bayesian logistic regression analysis showed that children from households with no toilet facilities were more likely to have suffered from diarrhoea than those who own such facilities (odds ratio (OR): 1.72, 95% CI: 1.18, 2.51). On the other hand children from households that use private taps were less likely to have suffered diarrhoea than those that use public taps (OR = 0.16, 95% CI: 0.08, 0.32). Those where each member uses own basin (OR = 0.37, 95% CI: 0.20, 0.70) or running water on a tap (OR = 0.10, 95% CI: 0.02, 0.53) for washing hands were less likely to have suffered diarrhoea than those that use cups to pour water from containers.