Objective To investigate the relationship between unsafe child feces disposal, environmental enteropathy, and impaired growth, we conducted a prospective cohort study of 216 young children in rural Bangladesh. Study design Using a prospective cohort study design in rural Bangladesh, unsafe child feces disposal, using the Joint Monitoring Program definition, was assessed using 5-hour structured observation by trained study personnel as well as caregiver reports. Anthropometric measurements were collected at baseline and at a 9-month follow-up. Stool was analyzed for fecal markers of environmental enteropathy: alpha-1-antitrypsin, myeloperoxidase, neopterin (combined to form an environmental enteropathy disease activity score), and calprotectin. Findings Among 216 households with young children, 84% had an unsafe child feces disposal event during structured observation and 75% had caregiver reported events. There was no significant difference in observed unsafe child feces disposal events for households with or without an improved sanitation option (82% vs 85%, P  = .72) or by child's age ( P  = .96). Children in households where caregivers reported unsafe child feces disposal had significantly higher environmental enteropathy scores (0.82-point difference, 95% CI 0.11-1.53), and significantly greater odds of being wasted (weight-for-height z score <−2 SDs) (9% vs 0%, P  = .024). In addition, children in households with observed unsafe feces disposal had significantly reduced change in weight-for-age z-score (−0.34 95% CI −0.68, −0.01 and weight-for-height z score (−0.52 95% CI −0.98, −0.06). Conclusion Unsafe child feces disposal was significantly associated with environmental enteropathy and impaired growth in a pediatric population in rural Bangladesh. Interventions are needed to reduce this high-risk behavior to protect the health of susceptible pediatric populations.