This study was conducted to assess the prevalence of anemia among preschool children (3-5 years) and its association with malnutrition in rural Barabanki district of Uttar Pradesh, India. Three out of 18 sub-centers in Nindura block, Barabanki, each with six villages, were randomly selected for this survey and 654 boys and 546 girls were included. Mean hemoglobin level in g/dL among boys and girls was 10.1 (SD: 1.66) and 9.9 (SD: 1.67) (P <0.06) respectively. The proportion of anemic children (Hb <11 g/dL) was 70%. Boys were heavier and taller as compared to girls. Among the 67.3% underweight children the mean hemoglobin level was 9.85 (SD: 1.67) as compared to 10.39 (SD: 1.62) in those without malnutrition (P <0.0001). Likewise, stunted children (87.6%) had statistically significantly lower mean hemoglobin levels than those not stunted. The odds ratio of an underweight and stunted child having moderate to severe anemia was 1.66. While more than half caretakers knew about the term "anemia " and associated physical weakness with it, only very few (2.5%) knew that iron intake will improve it. They relied on "doctors" (86.7%) for anemia prevention.