: More than half of the dead babies, toddlers and is associated with poor maternal nutritional status. The risk of death in children with severe malnutrition 13 times greater than a normal child. This study aimed to analyze the effect of Protein Energy Malnutrition in children aged 7-24 months with acute diarrhea. By using the case control study, 45 children between the age of 7-24 months who suffer acute diarrhea were matched with the same number, age and sex group who did not suffer acute diarrhea. Consecutive sampling was used for those children in Posyandu which were under the supervision of The Ibrahim Adjie Community Health Center, Bandung. Multivariable analysis showed that PEM was a major risk factor contributing to acute diarrhea, with incident risk was 4.2 times in children between the age of 7- 24 months with stunting nutrition status compared to the children with normal nutrition status, using nonexclusive breast feeding and bad health environment as controlled variables. The highest risk in acute diarrhea incident (79,4 %), was showed in children between the age of 7-24 months with stunting nutrition status caused by PEM, nonexclusive breast feeding, and unfavorable health environment. On the contrary, the chance of acute diarrhea was smallest (8,7 %) in normal nutrition status, exclusive breast feeding for the first six months and good health environment.