Diarrhea and malnutrition are major health problems in developing countries. Inflammation, high oxidative stress, poor nutritional status, and fatty liver were encountered during such diseases. Patents for diarrhea and malnutrition management (WO2007/130882A2, WO00/37106A1, WO2014/152420, and CA2987364A1) were published. The objective was to introduce anti-diarrhea functional foods with a preventive effect on malnutrition. Two processing techniques were applied for preparing functional foods (formula 1 ingredients were made into cookies followed by grinding; formula 2 ingredients were pre-cooked, dried, and mixed in powder form) that were evaluated in a rat model of diarrhea with malnutrition (DM). Formula 2 was also assessed when mixed with nucleotides. The ingredients were edible plants that possess an anti-diarrheal effect with high protein sources (legumes and casein). Induction of diarrhea with malnutrition, high oxidative stress, inflammation, accumulation of liver fat, and histopathological changes were demonstrated in DM control compared to normal control. The functional foods produced variable improvement in growth curves, food efficiency ratio, hemoglobin, hematocrit and plasma zinc, protein, albumin, globulin, lipase activity, and MDA. Formula 1 was superior in improving intestinal histopathology while formula 2 was more efficient in elevating plasma iron. Formula 2 with nucleotides was the best in improving growth curves, alkaline phosphatase, and reducing liver fat. Intestinal mucosa reduced glutathione and nitrite showed an efficient significant reduction on treatment with formula 2 with or without nucleotides. The formulas showed an anti-diarrheal effect by improving feces weight and moisture content. Studied functional foods showed an anti-diarrheal effect and malnutrition improvement with different degrees.