We review the pathophysiology of intestinal water and electrolyte transport leading to diarrhoea, the currently available pharmacological strategies for its treatment, and the economic implications of such treatments. Diarrhoea occurs most frequently and is associated with highest mortality in children under 5. Oral rehydration therapy (ORT) is the cornerstone of its management. The safety and efficacy of ORT in the prevention of death from dehydration, both in field and also in hospital settings, are now well established. Because it is also inexpensive, ORT is widely applicable worldwide. More recently, rice-based ORT has emerged, based on well known traditional remedies for diarrhoea in southeast Asia and the Far East. Rice-based ORT has the advantage of being more culturally acceptable, readily available even in rural homes in developing countries, and is more effective in reducing stool output and the duration of diarrhoea, compared with conventional glucose-electrolyte solutions such as World Health Organization ORT. For infants, the well known antidiarrhoeal properties of human milk needs emphasis for a variety of reasons including economic ones. Data concerning the economic benefits to a nations' health budget as a result of nationwide implementation of oral rehydration solution (ORS) use are limited. Available data from individual centres in developing countries, if projected to national level, would incur considerable economic advantage. Except for a few notable infections such as shigellosis, cholera, amoebiasis and giardiasis, the widespread use of antibiotics in acute diarrhoea, still a common practice in many developing countries, has no proven value and may be detrimental. The economic implications of antibiotic abuse in the treatment of diarrhoea in developing countries is enormous. Despite the availability of a wide spectrum of pharmacological agents for diarrhoea reviewed in this article, only a few such agents are of proven clinical efficacy: corticosteroids, aminosalicylates and immunosuppressants in the treatment of inflammatory bowel disease and opioid derivatives such as loperamide which may be useful in protracted diarrhoea in children and in disorders where rapid gastrointestinal transit is the main cause of diarrhoea. Opioids are not recommended for acute infective diarrhoea in childhood. Octreotide, a somatostatin analogue, is reported to be useful in the treatment of secretory diarrhoea due to noninfective causes and in the treatment of intractable diarrhoea associated with AIDS. Its high cost and need for parenteral administration prevent its wider application.(ABSTRACT TRUNCATED AT 400 WORDS)