Early diagnosis and treatment of malaria cases is one of the basic elements of the current global malaria control strategy. In order to provide this service to people in rural areas there is a need for new cost-effective approaches. To ensure that such new approaches are acceptable to the target communities, it is important to know the rationale for people's malaria treatment-seeking behavior. The present study provides insights into the reasons for people's preferences for different types of healthcare facilities and describes variation of these preferences within a rural community in Sri Lanka. The study reports on the experiences with the establishment of a village health facility and its effect on the treatment-seeking behavior of the population. After the introduction of the village treatment center it quickly took over the role of main provider for diagnosis and treatment of malaria from the government facilities. The treatment center did not improve the response time in seeking treatment for young children, but the delay for adults was reduced by 1-2 days. Mothers with small children often preferred the government facilities since they wanted a more qualified opinion than available from the locally recruited staff of the village treatment center. The treatment center significantly reduced the stress and discomfort experienced by the elderly and handicapped segment of the community. The study indicated that the effective catchment area of a village treatment center will be influenced by the degree of initial support from key individuals in the communities, the selection procedure and training of assistants, and the history of the relationships between different villages to be served by the center. The government health services and communities across the dry zone of Sri Lanka could benefit substantially from the establishment of more village treatment centers. To ensure the long-term sustainability of these type of facilities it is necessary to assess the feasibility of charging a user fee and establishing multi-purpose clinics. Government policies and administrative procedures will need to be adjusted to make the successful operation of village treatment centers possible.