Objectives. To improve our understanding of climate variability and diarrheal disease at the community level and inform predictions for future climate change scenarios, we examined whether the El Niñ o climate pattern is associated with increased rates of diarrhea among Peruvian children. Methods. We analyzed daily surveillance data for 367 children aged 0 to 12 years from 2 cohorts in a peri-urban shantytown in Lima, Peru, 1995 through 1998. We stratified diarrheal incidence by 6-month age categories, season, and El Niñ o, and modeled between-subject heterogeneity with random effects Poisson models. Results. Spring diarrheal incidence increased by 55% during El Niñ o compared with before El Niñ o. This increase was most acute among children older than 60 months, for whom the risk of a diarrheal episode during the El Niñ o spring was nearly 100% greater (relative risk = 1.96; 95% confidence interval = 1.24, 3.09). Conclusions. El Niñ o-associated climate variability affects community rates of diarrhea, particularly during the cooler seasons and among older children. Public health officials should develop preventive strategies for future El Niñ o episodes to mitigate the increased risk of diarrheal disease in vulnerable communities.