The aim of this study was to examine the effect of demographic, socioeconomic, environmental, maternal reproductive, dietary, and nutritional variables on diarrhea risk and prognosis using a hierarchical framework. A case-control study of children aged 0-23 months in Greater Metropolitan Porto Alegre was conducted during the peak season for diarrhea in 1987-1988. Three groups were investigated, with 192 children each. The first group included hospitalized children with an episode of acute diarrhea complicated by moderate to severe dehydration. The second group included children with acute mild diarrhea without signs of dehydration who were identified in the same neighborhood as hospitalized cases. The third group consisted of controls without diarrhea. Mothers were interviewed by trained interviewers using a standardized questionnaire. Data analysis included a hierarchical approach to control for confounding, using conditional logistic regression. Comparison of the three groups aimed to identify risk factors for diarrhea complicated by dehydration, prognostic factors for dehydration, and risk factors for mild diarrhea. Low birth weight, stunting, and lack or breastfeeding acted simultaneously as risk and prognostic factors for diarrhea.