Background Severe acute malnutrition (SAM) affects about 13 million under-five children (U5), with an estimated one million dying every year. In this study we aimed at determining the in hospital mortality and its associated factors among U5s admitted with SAM. Methods This was a prospective cohort study of children 6 months to 5 years with SAM admitted at Mbarara Regional Referral Hospital (MRRH) between June and August 2015. Caretakers were interviewed to collect socio-demographic and clinical information. Children underwent physical examination and had blood drawn for HIV, serum glucose, malaria, full blood count, culture and serum electrolytes investigation. Children were managed according to WHO treatment guidelines for SAM. All participants were followed up for a maximum period of 30 days. The proportion of U5 deaths within the first 48 hours and during the entire admission period was calculated. Using Poisson regression analysis, predictors of in-hospital mortality were analyzed with STATA/IC 11.0. Results We enrolled 122 children, median age of 15 months [IQR:11-24], 58.2% males, 90% immunized, 81% ill for more than 2 weeks before admission, 71% from lower health facilities and majority with unknown HIV status(76%). Overall, 13 (10.7%) children died in hospital. Seven (5.7%) died within the first 48 hours. Intravenous (IV) fluid administration significantly predicted in-hospital mortality (adjusted IRR: 7.2, 95%CI: 2.14-24.08, p = 0.001). Conclusion The in-hospital mortality in U5s with SAM was lower than that previously reported in central Uganda. Intravenous fluid administration significantly predicted overall in-hospital mortality. While Administration of intravenous fluids is still the main stay of managing severely