Background: High prevalence of malnutrition across India poses a significant obstacle to achieving desirable child health outcomes. For addressing childhood malnutrition, the government of Chhattisgarh during 2010–2014 established Nutrition Rehabilitation Centers (NRCs) in selected health units for the timely, adequate, and appropriate feeding of children, and for improving skills of mothers and caregivers on age-appropriate caring, counseling, and growth monitoring. This study examined the functioning of NRCs in three districts; assessed perception of mothers and carers of children admitted in the NRC; and assessed the perspectives of service providers. Methods: Four out of 46 NRCs were purposively chosen. Monthly performance reports of 2012–2014 were reviewed. Fifty mothers/carers of under-five children were interviewed; and ten in-depth interviews were conducted with the service providers. Descriptive statistics, co-relational, and regression models were used for data analysis; qualitative data were analyzed thematically. Results: Vacancy of staff ranged from 7.4% to 70%. The mean age of children during admission was 23.8 ± 6.2 months. The mean percentage weight gain was 11.6%, whereas the mean duration of stay in the NRC was 10.7 ± 3.5 days. Weight gain was directly related to the weight during admission. Follow-up visit and follow-up card issuing, counseling to mothers, special diet preparation, timely receipt of incentives, and training on diet preparation needed immediate attention. Conclusions: Regular review and supportive supervision could play a crucial role in improving the quality of services. The awareness level and expectation of mothers could be improved through NRC-based education and outreach services.