BACKGROUND: Exposure to unhealthy environments and inadequate child stimulation are main risk factors that affect children’s health and wellbeing in low- and middle-income countries. Interventions that simultaneously address several risk factors at the household level have great potential to reduce these negative effects. We present the design and baseline findings of a cluster-randomised controlled trial to evaluate the impact of an integrated home-environmental intervention package and an early child development programme to improve diarrhoea, acute respiratory infections and childhood developmental outcomes in children under 36 months of age living in resource-limited rural Andean Peru. METHODS: We collected baseline data on children’s developmental performance, health status and demography as well as microbial contamination in drinking water. In a sub-sample of households, we measured indoor kitchen 24-h air concentration levels of carbon monoxide (CO) and fine particulate matter (PM2.5) and CO for personal exposure. RESULTS: We recruited and randomised 317 children from 40 community-clusters to four study arms. At baseline, all arms had similar health and demographic characteristics, and the developmental status of children was comparable between arms. The analysis revealed that more than 25% of mothers completed primary education, a large proportion of children were stunted and diarrhoea prevalence was above 18%. Fifty-two percent of drinking water samples tested positive for thermo-tolerant coliforms and the occurrence of E.coli was evenly distributed between arms. The mean levels of kitchen PM2.5 and CO concentrations were 213 μg/m3 and 4.8 ppm, respectively. CONCLUSIONS: The trial arms are balanced with respect to most baseline characteristics, such as household air and water pollution, and child development. These results ensure the possible estimation of the trial effectiveness. This trial will yield valuable information for assessing synergic, rational and cost-effective benefits of the combination of home-based interventions. TRIAL REGISTRY: ISRCTN-26548981.