Aims: To test for the coexistence of social inequalities in undernutrition and obesity in preschool children. Methods: Retrospective, cross sectional, study of routinely collected data from 74 500 children aged 39-42 months in 1998/99. Main outcome measures were weight, height, sex, and age routinely recorded by health visitors. Body mass index (BMI) standardised for age and sex, relative to UK 1990 reference data, was used to define undernutrition (BMI <2nd centile) and obesity (BMI >95th centile; BMI >98th centile). Social deprivation was assessed as Carstairs deprivation category (1 = most affluent to 7 = most deprived). Results: Both undernutrition (3.3%) and obesity (8.5% above 95th centile; 4.3% above 98th centile) significantly exceeded expected frequencies from UK 1990 reference data. Undernutrition and obesity were significantly more common in the more deprived families. Odds ratios in deprivation category 7 relative to category 1 were 1.51 (95% CI 1.22 to 1.87) for undernutrition (BMI <2nd centile) and 1.30 (95% CI 1.05 to 1.60) for obesity (BMI >98th centile). The cumulative prevalence of under and overnutrition (malnutrition) in the most deprived group was 9.5% compared to 6.9% in the least deprived group. Conclusions: Undernutrition and obesity are significantly more common than expected in young children and strongly associated with social deprivation. Both undernutrition and obesity have adverse short and long term health effects. Public health strategies need to tackle malnutrition (both undernutrition and obesity) in children and take into consideration the association with social deprivation.