"In rural Laos today, every second child is chronically malnourished," the agency's representative in the country, Christa Raeder, said in a statement.
"Despite the economic growth experienced in Laos over the past decade, chronic malnutrition of children below five years of age remains high."
About 255,000 children are at risk in the communist country, which in 2005 had a population of 5.6 million. The WFP based its findings on a survey of 4,000 households carried out in October and November 2006.
"Food insecurity is especially critical in the northern provinces of Bokeo and Xiengkhuang, and in Saravane and Sekong provinces in the south," the WFP said.
The World Bank says that economic growth jumped from 5.9 percent to 7.5 percent between 2002 and 2006, but the WFP says that 71 percent of the population in 2004 still lived on less than two dollars a day.
"Households in Laos mainly rely on their own production. Rice production is the main livelihood activity of the majority of rural households," the WFP said, noting that only 27 percent of the population lives in urban areas.