Abstract Background Children presenting to hospital with recent or current Plasmodium falciparum malaria are at increased the risk of invasive bacterial disease, largely enteric gram-negative organisms (ENGO), which is associated with increased mortality and recurrent morbidity. Although incompletely understood, the most likely source of EGNO is the bowel. We hypothesised that as a result of impaired gut-barrier function endotoxin (lipopolysaccharide), present in the cell-wall of EGNO and in substantial quantities in the gut, is translocated into the bloodstream, and contributes to the pathophysiology of children with severe malaria. Methods We conducted a prospective study in 257 children presenting with malaria to two hospitals in Kenya and Uganda. We analysed the clinical presentation, endotoxin and cytokine concentration. Results Endotoxaemia (endotoxin activity ≥0.4 EAA Units) was observed in 71 (27.6%) children but its presence was independent of both disease severity and outcome. Endotoxaemia was more frequent in children with severe anaemia but not specifically associated with other complications of malaria. Endotoxaemia was associated with a depressed inflammatory and anti-inflammatory cytokine response. Plasma endotoxin levels in severe malaria negatively correlated with IL6, IL10 and TGFβ (Spearman rho: TNFα: r=−0.122, p=0.121; IL6: r=−0.330, p<0.0001; IL10: r=−0.461, p<0.0001; TGFβ: r=−0.173, p<0.027). Conclusions Endotoxaemia is common in malaria and results in temporary immune paralysis, similar to that observed in patients with sepsis and experimentally-induced endotoxaemia. Intense sequestration of P. falciparum-infected erythrocytes within the endothelial bed of the gut has been observed in pathological studies and may lead to gut-barrier dysfuction. The association of endotoxaemia with the anaemia phenotype implies that it may contribute to the dyserythropoesis accompanying malaria through inflammation. Both of these factors feasibly underpin the susceptibility to EGNO co-infection. Further research is required to investigate this initial finding, with a view to future treatment trials targeting mechanism and appropriate antimicrobial treatment.