Magnitude and distribution of Diarrhoea and Acute Respiratory Infections (ARI) in children were studied within a larger research that focused on health education. Two household surveys were conducted in a sample of families with at least one child under five years of Recife and Olinda in April-May 1992 and 1994. The total number of children studied was 5436. The estimated adjusted annual incidence rate (AAIR) of diarrhoea was 2.7 episodes per child. The two-week incidence rate of diarrhoea was 10.2% for both years. Risk factors associated with higher incidence of diarrhoea were age (under two years), lack of sanitation facilities and the absence of electric appliances in the household. The estimated AAIR of ARI was 9.5 episodes per child. The two-week incidence rate of ARI was 41.0% in 1992 and 32.6% in 1994. Majority of ARI affected the high respiratory track (75.9%). The only factor consistently associated with a higher risk of ARI was age (under three years). Study results indicate that both pathologies are still an important health problem for children under five in Pernambuco. In particular, in the case of diarrhoea the need for improving the access to basic services, such as water supply and sewerage system is urgently needed.