We examined changes in diarrhea prevalence and treatment in Brazil between 1986 and 1996. Over this 10-year period there was a small decline in diarrhea prevalence but treatment with oral rehydration therapy (ORT) increased greatly. Deaths due to dehydration were thus averted, although the costly burden of morbidity remained high. The decline in diarrhea prevalence was largely due to changes in the effects of several key covariates, such as breastfeeding, with only a modest role played by socioeconomic change, infrastructure improvements, and other behavioral factors. ORT treatment of diarrhea was essentially unrelated to child and family characteristics, suggesting that the large increase was due to the success of public health efforts to promote its use widely. Our results suggest that the most effective policies for reducing diarrhea prevalence are likely to be further increases in education and the promotion of breastfeeding. Persistent disparities in diarrhea prevalence mean that policies to prevent the disease should be targeted at disadvantaged socioeconomic groups. © 2010 Springer Science+Business Media B.V.