ObjectiveEarly childhood functional difficulty poses a substantial worldwide public health challenge, leading to adverse effects on children’s quality of life and overall productivity. Moreover, it represents a significant social and economic problem in Bangladesh. Therefore, the current study aimed to identify factors contributing to childhood functional difficulty in Bangladesh within the context of urban–rural areas.MethodsA nationally representative cross-sectional survey data from Multiple Indicator Cluster Survey (MICS), 2019 in Bangladesh was used in this study. Chi-square test and multivariable logistic regression analyses were carried out to identify factors associated with childhood functional difficulty.ResultsFunctional difficulties were found in approximately 3.3% of children 2–4 years of age in urban areas and 2.5% in rural areas. Having a mother with functional difficulties and undernutrition were identified as significant factors common in both urban and rural areas. Further, mothers who had no formal education (AOR = 2.76, 95%CI = 1.18–6.45) and experienced infant death (AOR = 1.94, 95%CI = 1.01–3.70) were identified as significant factors of functional difficulty in urban areas. On the other hand, in rural areas, no access to mass media, children with acute respiratory infection (ARI) (AOR = 2.13, 95%CI = 1.39–3.28), female sex (AOR = 0.69, 95%CI = 0.53–0.91), child undernutrition (AOR = 1.73, 95%CI = 1.32–2.27) and poorer socio-economic status (AOR = 1.95, 95%CI = 1.08–3.55) were found significant factors.ConclusionFunctional difficulty was found to be present in one out of every 35 children age 2 to 4 years in Bangladesh. Childhood functional difficulties were reported slightly higher in urban areas as compared to rural areas. Reducing childhood difficulties in urban areas demands comprehensive strategies: quality healthcare, inclusive education, community support, better information systems, and collaboration. To achieve urban–rural parity in child health, address disparities in economic development, healthcare, and education, especially for girls.