Introduction: Concomitant occurrence of severe acute malnutrition (SAM) and diarrhoea increases child risk poor health outcomes. Prevalence and influence of diarrhoea in children with SAM after discharge from Hospital was investigated. Method: A ninety (90) days hospital-based prospective cohort study that followed up 76 children with SAM aged 6 to 59 months old treated at Amana Regional Referral Hospital in Dar-es-Salaam from September 2019 to March 2020. Data on socio-economic and demographic characteristics and medical history were collected up on enrolment and during the follow up. Incidence density (ID) was used to quantify the frequency of occurrence of health outcomes. Incidence Density rate (IDR) was used to quantify the difference in rates while T-test and Chi-Square tests were used to compare difference in mean or percentage values. Results: Seventy six (76) children were enrolled into the study, 50 children (65.8%) had data for more than 2 visits, and 26 (34.2%) had complete data for 7 visits. Of the children enrolled, 64 (84.2%) were treated as inpatients while 12 (15.8%) were treated as outpatients. Oedema was significantly more prevalent among children without diarrhoea (55.0%) than in children with diarrhoea (23.3%, p < 0.05) while the outcome of severe wasting was significantly more prevalent in children with diarrhoea (26.7%) than in children without diarrhoea (15.00%, p< 0.05). Children with diarrhoea had significantly longer duration of fever (Mean 6.07days, SD 6.71, p < 0.05) and poor appetite (Mean 25.80 days, SD 36.35, p < 0.05) than children without diarrhoea (Mean 2.35 days, SD 3.66 and Mean 3.30, SD 6.88, respectively). Neither the presence of diarrhoea nor admission status had significant effect on the outcome in mortality during the study (p> 0.05) Conclusion: The study found that after discharge from the hospital there is a higher occurrence of common medical complications such as fever, chest symptoms, vomiting and poor appetite in children with diarrhoea during follow up than in children without diarrhoea.