Introduction In developing countries such as India, severe acute malnutrition (SAM) has been a cause for great concern in the pediatric population. SAM is associated with significant morbidity and mortality in children less than 60 months of age and leaves them vulnerable to diseases due to a decrease in immunological response. Children with SAM are prone to infections, and due to nutritional deficiency, many have anemia whichmay be a direct or indirect cause of morbidity and mortality. They are affected by frequent respiratory and gastrointestinal infections. Methodology A cross-sectional study was conducted for a period of two months, from December 1,2023, to January 31, 2024, in children with SAM aged less than 60 months. A detailed history and demographic profile were taken and recorded in a predesigned proforma. Anthropometric measurements of the study subjects were recorded, and lab investigations included complete blood picture, serum iron, serum ferritin, serum folate, and serum vitamin B12 levels. The prevalence and severity of anemia were determined by assessing the hemoglobin levels. The data collected was analyzed in Excel sheets (Microsoft Corporation, Redmond, Washington, United States) and the results were depicted in the form of graphs. Results A total of 300 children were included in the study of which 22 children were aged less than six months and 278 children were in the age group of 6-60 months. The overall gender distribution was 124 (41.4%) males and 176 (58.6%) females. In the age group of <6 months, of the 22 children, six (27.27%) were females while 16 (72.72%) were male. In the age group of 6-60 months, of the 278 children, 170 (61%) were females while 108 (39%) were males. Of the total 300 children, 232 (77.3%) were found to be anemic, of which 54 (23.2%) had mild anemia, 162 (69.8%) had moderate anemia, and 16 (6.89%) had severe anemia. Low serum iron levels were detected in 134 (44.6%) with iron deficiency being more common in females; below-normal ferritin levels were seen in 153 (51%) cases. Folate levels were found to be deficient in 97 (32.3%) children while vitamin B12 levels were deficient in 186 (62%). Conclusion Anemia is a common occurrence in children with SAM. Prevention of anemia starts from the womb by improvement of maternal nutrition and iron, and folic acid supplementation during pregnancy. Exclusive breastfeeding up to six months of age and further continuation of breastfeeding coupled with initiation of home-available complementary feeding from the age of six months onwards go a long way in maintaining healthy nutrition status inchildren in the vulnerable age group of less than 60 months. Healthcare professionals should utilize thewell-baby and well-child visits to educate the parents and primary caretakers regarding the feeding practicesto prevent, detect, and treatanemia, which will help reduce the morbidity and mortality in children with SAM.