We prospectively assessed immune markers in children <6 years with severe malarial anemia (hemoglobin <5.0 g/dL; n = 72) and uncomplicated malaria (n = 69) who presented to Macha Mission Hospital in Zambia's Southern Province. We also studied 70 children <6 years who presented to well child clinics in Harare, Zimbabwe as controls. Compared to controls, children with uncomplicated malaria had significantly higher temperatures and parasite counts, lower hemoglobin and platelet concentrations, higher plasma levels of interferon-gamma, tumor necrosis factor alpha, and interleukin 10 and lower levels of monocyte inhibitory factor (MIF). Compared to uncomplicated malaria, severe malaria anemia was associated with younger age, longer duration of fever and lower temperature on admission. Reticulocyte index and serum concentrations of bilirubin and LDH did not differ between the malaria groups, suggesting that unusually severe extra- or intra-medullary hemolysis did not explain the severe anemia. Higher white blood cell and platelet counts in the severe malaria group suggested that pan-suppression of the marrow was also not the primary cause. Of originally selected measures of inflammation, plasma levels of TNF-alpha and MIF did not differ between the malaria groups, but concentrations of both interferon-gamma and interleukin-10 were significantly lower in the severe anemia group (P <0.006). Additional testing revealed levels of interleukin-1alpha, interleukin-6, and IP-10 to be lower and levels of sFAS to be higher in the children with severe anemia versus uncomplicated malaria (P <0.0005). In a logistic regression model, severe malarial anemia was associated with younger age (P = 0.010), prior treatment with sulfadoxine/pyrimethamine or traditional medicine (P <0.32), lower levels of Interleukin-10 (P = 0.025) and higher levels of sFAS (P = 0.003) and TNFa (P = 0.013). Our results are consistent with a multifactorial cause of severe malarial anemia, possibly including infection with resistant plasmodia, over-expression of TNF-alpha in conjunction with under-expression of IL-10, and increased apoptosis.