Abstract Background Home-management of malaria (HMM) strategy improves early access of anti-malarial medicines to high-risk groups in remote areas of sub-Saharan Africa. However, limited data are available on the effectiveness of using artemisinin-based combination therapy (ACT) within the HMM strategy. The aim of this study was to assess the effectiveness of artemether-lumefantrine (AL), presently the most favoured ACT in Africa, in under-five children with uncomplicated Plasmodium falciparum malaria in Tanzania, when provided by community health workers (CHWs) and administered unsupervised by parents or guardians at home. Methods An open label, single arm prospective study was conducted in two rural villages with high malaria transmission in Kibaha District, Tanzania. Children presenting to CHWs with uncomplicated fever and a positive rapid malaria diagnostic test (RDT) were provisionally enrolled and provided AL for unsupervised treatment at home. Patients with microscopy confirmed P. falciparum parasitaemia were definitely enrolled and reviewed weekly by the CHWs during 42 days. Primary outcome measure was PCR corrected parasitological cure rate by day 42, as estimated by Kaplan-Meier survival analysis. This trial is registered with ClinicalTrials.gov, number NCT00454961. Results A total of 244 febrile children were enrolled between March-August 2007. Two patients were lost to follow up on day 14, and one patient withdrew consent on day 21. Some 141/241 (58.5%) patients had recurrent infection during follow-up, of whom 14 had recrudescence. The PCR corrected cure rate by day 42 was 93.0% (95% CI 88.3%-95.9%). The median lumefantrine concentration was statistically significantly lower in patients with recrudescence (97 ng/mL [IQR 0-234]; n = 10) compared with reinfections (205 ng/mL [114-390]; n = 92), or no parasite reappearance (217 [121-374] ng/mL; n = 70; p ≤ 0.046). Conclusions Provision of AL by CHWs for unsupervised malaria treatment at home was highly effective, which provides evidence base for scaling-up implementation of HMM with AL in Tanzania.