Abstract Background Parenting programmes are effective in enhancing parenting practices and child development. This study evaluated the effects of a intervention with psychosocial stimulation (PS) on the quality of the home environment and mothers’ child-rearing practices in a community-based trial with severely malnourished Bangladeshi children. Method Severely underweight children (n = 507), 6–24 months of age, were randomly assigned to five groups: PS; food supplementation (FS); PS + FS; clinic-control (CC); and, hospital-control (CH). PS included fortnightly follow-up visits for six months at community clinics where a play leader demonstrated play activities and gave education on child development and child rearing practices. FS comprised cereal-based supplements (150–300 kcal/day) for three months. All groups received medical care, micronutrient supplements and growth monitoring. Mothers were given the Home Observation for Measurement of the Environment (HOME) inventory and a questionnaire on parenting at baseline and after six months to assess the outcome. Results 322 children completed the study. After six months of intervention the PS + FS and PS groups benefitted in the total HOME score (depending on the comparison group, effect sizes varied from 0.66 to 0.33 SD) The PS + FS and PS groups also benefitted in two HOME subscales: maternal involvement (effect sizes: 0.8 to 0.55 SD) and play materials, (effect sizes: 0.46 to 0.6 SD), and child-rearing practices scores (effect size: 1.5 to 1.1 SD). The PS + FS group benefitted 4.0 points in total HOME score compared with CH, 4.8 points compared with CC and 4.5 points compared with FS (p