Abstract. Chronic infection over a 16-month period and stunting of preschool children were compared between more spatially dense versus dispersed households in rural Panamá. Chronic protozoan infection was associated with higher household density, lower household wealth index, poor household water quality, yard defecation, and the practice of not washing hands with soap before eating. Models for chronic diarrhea confirmed the importance of household wealth, water quality, sanitation, and hygiene practices. Furthermore, chronic protozoan infection was an important predictor for low height-for-age, along with low household wealth index scores, but not household density. Thus, despite better access to health related infrastructure in the more densely populated households, chronic protozoan infection was more common, and was associated with higher rates of child stunting, compared with more dispersed households.