In 1997, the prevalence of anaemia was 40.9 % among children aged 6-59 months in the State of Pernambuco, north-east Brazil. Using the same sample of children, we have investigated possible reasons for this high prevalence. A representative sample was selected through a three-stage process: proportional systematic random sampling of municipalities in the State, systematic random sampling of census sectors within these municipalities, and finally, simple random sampling of households with children aged 6-59 months to obtain the sample of 650 children. Data collection included demographic, environmental, socio-economic and maternal variables, and nutritional status and dietary intakes of the children. Multiple linear regression analysis was based on a hierarchical model of factors associated with Hb concentration. The mean Hb concentration of children aged 6-23 months was 10 g/l lower than that of older children. In the regression analysis, child age explained 8.3 % of the variance in Hb concentration. The intake of bioavailable Fe explained a further 3.3, serum retinol 2.7, diarrhoea 2.4, water treatment 1.7, sanitation 1.3 and low birth-weight 0.5 %. The final model explained 23.4 % of the variance in Hb concentration. We conclude that child age, bioavailable-Fe intake, serum retinol concentration, diarrhoea, water treatment, sanitation and low birth-weight are independently associated with Hb concentration. In north-east Brazil, anaemia prevention programmes among children should focus on those aged <2 years and should consider feasible strategies to improve intakes of bioavailable Fe and vitamin A, and reduce infection. Supplemental Fe should be given to low birth-weight infants.