Background: Overcrowding, unsanitary environment, inaccessible health facilities and poverty predispose slum children to ill-health and undernutrition. Purpose of this paper is to describe the prevalence and examine the predictors of undernutrition among children under five in the slums of Hyderabad, India. Materials and Methods: A cross-sectional survey was conducted in ten slums of Hyderabad, to appraise care giving practices and health and nutritional status of children under five. Data were collected from 506 slum households, selected through multistage stratified random sampling. Height-for-age and weight-for-age Z scores were computed after anthropometric measurements. Stunting and Underweight prevalence levels were estimated and role of child, mother and household factors was examined using bivariate as well as multivariate logistic regression analyses. Results: Prevalence of stunting and underweight was 39.8% and 33.5% respectively. Child’s age (OR-1.03; CI-1.02-1.05), birth weight (OR-1.96; CI-1.11 -3.48), birth interval (OR- 1.82; CI 1.03-3.21), mother’s BMI (OR-1.99; CI-1.26-3.14), and household wealth index (OR-2.06; CI-1.07-3.96; OR- 2.28; CI- 1.04-4.99) were the significant predictors of stunting. The predictors of underweight were child’s age (OR-1.04; CI-1.03-1.05), birth weight (OR-2.63; 95%CI-1.47 -4.7), sex (OR-1.54; CI-1.01-2.35), hygienic care (OR-2.06; CI-1.31- 3.23), and mother’s age at child birth (OR-2.01; CI-1.12-3.62). Apart from these, mother’s feeding response (OR-2.04; CI-1.01-4.14) was an important factor for children aged 6-23 months. Conclusion: Reassessment of slum health and development measures and intensified IEC programmes on maternal nutrition, hazards of early pregnancy, birth spacing, hygiene and appropriate feeding responses are necessary to improve nutrition of slum children.