In Sub-Saharan Africa, being overweight in childhood is rapidly rising while stunting is still remaining at unacceptable levels. A key contributor to this double burden of malnutrition is dietary changes associated with nutrition transition. Although the importance of socio-economic drivers is known, there is limited knowledge about their stratification and relative importance to diet and to different forms of malnutrition. The aim of this study was to assess diet diversity and malnutrition in preschoolers and evaluate the relative importance of socioeconomic resources. Households with children under five (5467) were enrolled using a multi-stage sampling procedure. Standardized tools and procedures were used to collect data on diet, anthropometry and socio-economic factors. Multivariable analysis with cluster adjustment was performed. The prevalence of stunting was 19.6% (18.5-20.6), wasting 3.2% (2.8-3.7), and overweight/obesity 11.4% (10.6-12.2). Stunting, overweight, wasting and limited diet diversity was present in all social strata. Low maternal education was associated with an increased risk of stunting (Adjusted odds ratio (AOR): 1.8; 1.4-2.2), limited diet diversity (AOR: 0.33; 0.26-0.42) and reduced odds of being overweight (AOR: 0.61; 0.44-0.84). Preschoolers in Addis Ababa have limited quality diets and suffer from both under-and over-nutrition. Maternal education was an important explanatory factor for stunting and being overweight. Interventions that promote diet quality for the undernourished whilst also addressing the burgeoning problem of being overweight are needed. software, S.A.; validation, H.Y.B., Y.B. and S.A.; formal analysis, H.Y.B., S.A.; investigation, H.Y.B., Y.B.; resources, H.Y.B., M.J., Y.B., B.A., E.-C.E.; data curation, E.-C.E., S.A.; writing-original draft preparation, H.Y.B.; writing-review and editingsupervision, H.Y.B.; project administration, H.Y.B., Y.B., E.-C.E.; funding acquisition, H.Y.B., M.J., Y.B., B.A., E.-C.E. All authors have read and agreed to the published version of the manuscript.