During the second year of a prospective study of diarrheal illness among 0- to 36-month-old children in day care centers in Maricopa County, Arizona, we concurrently studied children of the same age in 30 day care homes and 102 households not using day care. The seasonal pattern of diarrhea, frequency of pathogen isolation, and relative frequency of individual pathogens were similar in the three settings. Giardia lamblia and rotavirus were the most common enteropathogens. Asymptomatic infection was identified in 14% to 21% of infant-toddler contacts of pathogen-positive cases of diarrhea. We compared rates of diarrhea in the three settings using five serial biweekly family-based surveys during the period of highest diarrhea rates. The incidence in infants and toddlers in DCCs (42 cases per 100 child months) was significantly higher than in DCHs (23 cases per 100 child-months) and in households not using day care (27 cases per 100 child-months); the DCH rate did not differ significantly from that in households not using day care. Among household sample children who began using day care during the survey period, the incidence of diarrhea was significantly higher than in household sample children not using day care.