Proper diarrhoea treatment has received greater attention during the last 10 years. However, the unjustified use of medicines to treat simple episodes of acute diarrhoea continues to divert attention and available resources away from appropriate treatment. A study to identify the factors determining prescribing practices for diarrhoea treatment was carried out in a peri-urban part of Lima, Peru in 1991. Physicians were interviewed, and then their practice was assessed by visits of confederates with healthy children described as ill, by interviews with mothers of sick children leaving the clinic, or by both of these methods. Physicians' reported practices in treating diarrhoea cases were compared to their actual practices. Although physicians' knowledge of drug management seemed to influence the low frequency of prescription of antidiarrhoeal drugs, it did not have the same influence on prescription of antimicrobials. Our results suggest that the diagnostic process and consequently the treatment decision do not follow a scientific rationale for this illness. The physicians' prescribing practices seemed to be more related to agreement with social expectations and the caretakers' perception of the physicians' role than they were to the standard biomedical rules of diarrhoea management.