There is potential for recovery among children suffering from malnutrition. The extent to which there were improvements in the children’s Body Mass Index (BMI) is explored in the study of 890 children from rural areas of Pakistan using Pakistan Rural Household Survey (PRHS) 2001 and Pakistan Panel Household Survey (PPHS) 2010. Using the Body Mass Index (BMI) the percentage of underweight children is 55.72% in 2001 while it falls to 43.48% in 2010. The likelihood that the recovery of children was influenced by certain factors is calculated using the probit regression. Education of mothers in 2001 was associated with improved nutritional status of children in 2010. Similarly, other variables like the number of rooms in a house and ownership of assets which indicate the living conditions of a household had a positive relation with the recovery of children from malnutrition. These results show that there is a large potential for recovery in malnourished children as they grow into the adolescent years. Supervisor: Dr. G.M Arif