Factors associated with relapse among children who are discharged after reaching a threshold denoted ‘recovered’ from moderate acute malnutrition (MAM) are not well understood. The aim of this study was to identify factors associated with sustained recovery, defined as maintaining a mid-upper-arm circumference≥12·5 cm for 1 year after release from treatment. On the basis of an observational study design, we analysed data from an in-depth household (HH) survey on a sub-sample of participants within a larger cluster randomised controlled trial (cRCT) that followed up children for 1 year after recovery from MAM. Out of 1497 children participating in the cRCT, a subset of 315 children participated in this sub-study. Accounting for other factors, HH with fitted lids on water storage containers (P=0·004) was a significant predictor of sustained recovery. In addition, sustained recovery was better among children whose caregivers were observed to have clean hands (P=0·053) and in HH using an improved sanitation facility (P=0·083). By contrast, socio-economic status and infant and young child feeding practices at the time of discharge and HH food security throughout the follow-up period were not significant. Given these results, we hypothesise that improved water, sanitation and hygiene conditions in tandem with management of MAM through supplemental feeding programmes have the possibility to decrease relapse following recovery from MAM. Furthermore, the absence of associations between relapse and nearly all HH-level factors indicates that the causal factors of relapse may be related mostly to the child’s individual, underlying health and nutrition status.