Environmental enteropathy (EE) is a sub-clinical inflammatory condition of the intestine that contributes to malabsorption, growth failure, and impaired immunity in children from low-income countries. Stool myeloperoxidase (MPO) is a potential biomarker for assessing gut inflammation in malnourished children. The aim of the study was to estimate the MPO level in children with severe acute malnutrition (SAM), children with moderate acute malnutrition (MAM), and healthy children, and its association with clinical parameters. This prospective observational study was conducted from September 2018 to May 2020 in a tertiary care teaching hospital in northern India. Inclusion criteria were children aged 2-60 months admitted/attending the outpatient department with WHO criteria of SAM and MAM, and age and sex matched healthy children. Variables recorded were age, sex, and socioeconomic status, and clinical data, including detailed history, anthropometry, systemic examination, and laboratory investigations. Human MPO enzyme-linked immunosorbent assay (ELISA) Kit (ELK1062; ELK Biotechnology Co., Ltd, Wuhan, China) was used for estimating stool MPO levels. The levels were measured according to the manufacturer's guidelines, and the detection level ranged from 1.57 ng/ml to 100 ng/ml. A p-value <0.05 was considered significant. Receiver operating characteristic curve (ROC) analysis was performed to determine the predictive value of MPO for gut inflammation.A total of 61 SAM, 25 MAM, and 15 healthy children were included. Median MPO levels were significantly higher in SAM (20,000 ng/g) compared to MAM (9,500 ng/g, p=0.004) and healthy children (8,250 ng/g, p<0.001). MPO levels were not significantly associated with diarrhea (p=0.82), edema (p=0.83), or stunting (p=0.86). ROC analysis identified a cut-off MPO level of 6,875 ng/g, yielding 98% sensitivity and 93% specificity for differentiating gut inflammation in SAM versus healthy children with an area under the curve (AUC) of 0.84 (95%CI, 0.77-0.93) (p=0.000).SAM exhibited significantly elevated MPO levels without clinical correlation, indicating sub-clinical gut inflammation. MPO shows promise as a sensitive biomarker but requires validation in larger, longitudinal, and multi-biomarker studies.