Malaria is a leading cause of morbidity and mortality among children under five years of age, with most cases occurring in Sub-Saharan Africa. Children in this age group in Africa are at greatest risk worldwide for developmental deficits. There are research gaps in quantifying the risks of mild malaria cases, understanding the pathways linking malaria infection and poor child development, and evaluating the impact of malaria on the development of children under five years. We analyzed the association between malaria infection and gross motor, communication, and personal social development in 592 children age 24 months in rural, western Kenya as part of the WASH Benefits environmental enteric dysfunction sub-study. Eighteen percent of children had malaria, 20% were at risk for gross motor delay, 21% were at risk for communication delay, and 23% were at risk for personal social delay. Having a positive malaria test was associated with increased risk for gross motor, communication, and personal social delay while adjusting for child characteristics, household demographics, study cluster, and intervention treatment arm. Mediation analyses suggested that anemia was a significant mediator in the pathway between malaria infection and risk for gross motor, communication, and personal social development delays. The proportion of the total effect of malaria on the risk of developmental delay that is mediated by anemia across the subscales was small (ranging from 9% of the effect on gross motor development to 16% of the effect on communication development mediated by anemia). Overall, malaria may be associated with short-term developmental delays during a vulnerable period of early life. Therefore, preventative malaria measures and immediate treatment are imperative for children’s optimal development, particularly in light of projections of continued high malaria transmission in Kenya and Africa.