One in three preschool children in developing countries is undernourished. Consequently, they are likely to have impaired immune systems, poor cognitive development, low productivity as adults, and susceptibility to diet-related chronic diseases such as hypertension and coronary heart disease later in life. Undernourished female preschoolers are likely to grow into undernourished young women who are more likely to give birth to babies who are undernourished even before they are born, thus perpetuating the intergenerational transmission of deprivation. This report sheds light on some of the main causes of child malnutrition, projects how many children are likely to be malnourished in the year 2020 given current trends, and identifies priority actions for reducing malnutrition most quickly in the coming decades.