Abstract Background Children with severe malnutrition who develop shock have a high mortality. Contrary to contemporaneous paediatric practice, current guidelines recommend use of low dose hypotonic fluid resuscitation (half-strength Darrows/5% dextrose (HSD/5D). We evaluated the safety and efficacy of this guideline compared to resuscitation with a standard isotonic solution. Methods A Phase II randomised controlled, safety and efficacy trial in Kenyan children aged over 6 months with severe malnutrition and shock including children with severe dehydration/shock and presumptive septic shock (non-diarrhoeal shock). Eligible children were randomised to HSD/5D or Ringer's Lactate (RL). A maximum of two boluses of 15 ml/kg of HSD/5D were given over two hours (as recommended by guidelines) while those randomised to RL received 10 ml/kg aliquots half hourly (maximum 40 ml/kg). Primary endpoint was resolution of shock at 8 and 24 hours. Secondary outcomes included resolution of acidosis, adverse events and mortality. Results 61 children were enrolled: 41 had shock and severe dehydrating diarrhoea, 20 had presumptive septic shock; 69% had decompensated shock. By 8 hours response to volume resuscitation was poor with shock persisting in most children:-HSD/5D 15/22 (68%) and RL14/25 (52%), p = 0.39. Oliguria was more prevalent at 8 hours in the HSD/5D group, 9/22 (41%), compared to RL-3/25 (12%), p = 0.02. Mortality was high, HSD/5D-15/26(58%) and RL 13/29(45%); p = 0.42. Most deaths occurred within 48 hours of admission. Neither pulmonary oedema nor cardiogenic failure was detected. Conclusions Outcome was universally poor characterised by persistence of shock, oliguria and high case fatality. Isotonic fluid was associated with modest improvement in shock and survival when compared to HSD/5D but inconclusive due to the limitations of design and effectiveness of either resuscitation strategy. Although isotonic fluid resuscitation did not result in cardiogenic heart failure, as previously feared, we conclude that the modest volumes used and rate of infusion were insufficient to promptly correct shock. The adverse performance of the recommended fluid resuscitation guideline for severe malnutrition should prompt clinical investigation of isotonic fluids for resuscitation of compensated shock, defining rate and volumes required to inform future guidelines. Trial Registration The trial is registered as ISCRTN: 61146418