The study found that undernourishment, meaning the consumption or absorption of too few essential nutrients, was a contributing factor in more than a third of deaths of children under the age of five around the world.
But the scourge could be avoided if the international community honors its commitments on food security, nutrition and sustainable agriculture, the United Nations Children's Fund stressed.
"Undernutrition steals a child's strength and makes illnesses that the body might otherwise fight off far more dangerous," said UNICEF Executive Director Ann Veneman.
"More than one third of children who die from pneumonia, diarrhea and other illnesses could have survived had they not been undernourished."
Veneman noted that those who survive often suffer from poorer physical health throughout their lives and from a diminished capacity to learn and to earn a decent income.
"They become trapped in an intergenerational cycle of ill health and poverty," she said.
Over 90 percent of children who suffer from stunted growth in developing countries are in Africa and Asia, according to the report, titled "Tracking Progress on Child and Maternal Nutrition."
The best way to respond to the problem is through prevention, it added, insisting it is possible to reduce, if not eliminate, undernourishment through cost-effective solutions such as micronutrients.
Among the successes cited by the report were improved infant access to iodized salt and vitamin A supplements, which have helped reduce death rates among infants and newborns.
In the world's poorest countries, the percentage of children under the age of five who have received vitamin A doses has more than doubled, increasing from 41 percent in 2000 to 88 percent in 2008.
Exclusive breastfeeding for the first six months, together with nutritionally adequate foods, could reduce infant mortality rates by 12 to 15 percent in developing countries, the report said.
Even in the two continents with the greatest prevalence of stunted growth -- Africa and Asia -- there has been progress, it added.
In Asia, the prevalence of stunted growth in children has dropped from 44 percent in the 1990s to some 30 percent in 2008, while decreasing from 38 percent to 34 percent over the same period in Africa.
"Global commitments on food security, nutrition and sustainable agriculture are part of a wider agenda that will help address the critical issues raised in this report," Veneman said.
"Unless attention is paid to addressing the causes of child and maternal undernutrition today, the costs will be considerably higher tomorrow."
Reducing the infant mortality rate and improving maternal health are two of eight millennium development goals for 2015 set by world leaders in 2000.