A multi-centre randomised open trial was done to determine whether moderate oral fluid restriction or intravenous fluid at full maintenance volumes would result in a better outcome for children with bacterial meningitis in Papua New Guinea, and what clinical signs could guide fluid management. Children with clinical signs and cerebrospinal fluid suggestive of bacterial meningitis received either breast milk by nasogastric tube at 60% of normal maintenance volumes (n = 172) or intravenous half-normal saline and 5% dextrose at 100% of normal maintenance volumes (n = 174) for the 1st 48 hrs of treatment. An adverse outcome was death or severe neurological sequelae, and a good outcome was defined as intact survival or survival with at worst mild-to-moderate neurological sequelae. The probability of an adverse outcome was 24.7% in the intravenous group and 33.1% in the oral-restricted group, but the difference was not statistically significant (RR 0.75, 0.53-1.04, p = 0.08). Sunken eyes or reduced skin turgor at presentation were risk factors for an adverse outcome (OR 5.70, 95% CI 2.87-11.29) and were most strongly associated with adverse outcome in the fluid-restricted group. Eyelid oedema during treatment was also a risk factor for an adverse outcome (OR 2.54, 95% CI 1.36-4.75) and eyelid oedema was much more common in the intravenous group (26%) than in the restricted group (5%). For many children with bacterial meningitis in less developed countries, moderate fluid restriction is unnecessary and will be harmful; a normal state of hydration should be achieved but over-hydration should be avoided. Giving 100% of normal maintenance fluids, especially with intravenous hypotonic fluid, will lead to oedema in up to one quarter of children with bacterial meningitis. If additional intravenous fluids are required for children with meningitis, an isotonic solution should be used.