The algorithm developed for the integrated management of childhood illness (IMCI) provides guidelines for the treatment of paediatric malaria. In areas where malaria is endemic, for example, the IMCI strategy may indicate that children who present with fever, a recent history of fever and/or pallor should receive antimalarial chemotherapy. In many holo-endemic areas, it is unclear whether laboratory tests to confirm that such signs are the result of malaria would be very relevant or useful. Children from a holo-endemic region of Tanzania were therefore checked for malarial parasites by microscopy and by using two rapid immunochromatographic tests (RIT) for the diagnosis of malaria (ICT Malaria P.f/P.v and OptiMal. At the time they were tested, each of these children had been targeted for antimalarial treatment (following the IMCI strategy) because of fever and/or pallor. Only 70% of the 395 children classified to receive antimalarial drugs by the IMCI algorithm had malarial parasitaemias (68.4% had Plasmodium falciparum trophozoites, 1.3% only P. falciparum gametocytes, 0.3% P. ovale and 0.3% P. malariae). As indicators of P. falciparum trophozoites in the peripheral blood, fever had a sensitivity of 93.0% and a specificity of 15.5% whereas pallor had a sensitivity of 72.2% and a specificity of 50.8%. The RIT both had very high corresponding sensitivities (of 100.0% for the ICT and 94.0% for OptiMal) but the specificity of the ICT (74.0%) was significantly lower than that for OptiMal (100.0%). Fever and pallor were significantly associated with the P. falciparum asexual parasitaemias that equalled or exceeded the threshold intensity (2000/microl) that has the optimum sensitivity and specificity for the definition of a malarial episode. Diagnostic likelihood ratios (DLR) showed that a positive result in the OptiMal test (DLR = infinity) was a better indication of malaria than a positive result in the ICT (DLR = 3.85). In fact, OptiMal had diagnostic reliability (0.93) which approached that of an ideal test and, since it only detects live parasites, OptiMal is superior to the ICT in monitoring therapeutic responses. Although the RIT may seem attractive for use in primary health facilities because relatively inexperienced staff can perform them, the high cost of these tests is prohibitive. In holo-endemic areas, use of RIT or microscopical examination of bloodsmears may only be relevant when malaria needs to be excluded as a cause of illness (e.g. prior to treatment with toxic or expensive drugs, or during malaria epidemics). Wherever the effective drugs for the first-line treatment of malaria are cheap (e.g. chloroquine and Fansidar), treatment based on clinical diagnosis alone should prove cost-saving in health facilities without microscopy.