Background: Left untreated, moderate acute malnutrition (MAM) in children can lead to severe acute malnutrition, stunting, developmental delays, and death. Despite recent progress the prevalence of malnutrition remains high throughout Ethiopia. The ability to make accurate prognoses and develop effective treatment strategies for children with MAM is currently limited and, as result, a significant proportion of children with MAM fail to recover even with treatment. We seek to address this limitation by assessing the risk factors for poor outcomes among children under the age of 5 with MAM in a rural area of Ethiopia's Amhara Region. This region is considered relatively food secure and does not have food supplementation treatment programs. Methods: We conducted a prospective cohort study of 404 randomly sampled children, 0-59 months old stratified by household food security status. We followed the study children for approximately 2 months, assessing their health status; and used bivariate and multivariate Cox-proportional hazard regression models to identify risk factors for poor health outcomes. Results: Household food security was significantly associated with low recovery from MAM: 191 (60%) of children in food-insecure and 129 (40%) of children in food-secure households had poor health outcomes. The risk factors found to be significantly associated with poor health outcomes included the duration of exclusive breastfeeding (AHR 1.50, 95%CI: 1.05, 2.15), dietary diversity (AHR 1.74, 95%CI: 1.18, 2.54), and maternal mid-upper arm circumference (AHR=1.36, 95% CI: 1.04, 1.86). Children from pregnancies that were wanted but unplanned had 80% higher incidence of poor health outcomes than others, and children from pregnancies that were both unwanted and unplanned had more than double the incidence of poor health outcomes compared to their counterparts. Conclusion: We found that without treatment, the majority of children from food insecure households and over a third of children from food secure households did not recover from MAM. Maternal factors particularly the mother's ability to plan her pregnancy were the main determinants of recovery in this study. Together these findings support arguments for targeting of nutrition support programs to vulnerable households regardless of regional food security status, and for closely integrating robust family planning, and antenatal care services with nutrition interventions.