This study evaluated multiple factors that may contribute to an increased risk of childhood diarrhea in eastern Indonesia. Mothers with at least one child under the age of 5 years (n = 303) were interviewed face-to-face in two sub-districts of a large city in eastern Indonesia. Results showed that children were 4.72 times more likely to develop diarrhea if mothers washed their hands without soap after defecation (95% confidence interval (CI) 1.22–18.3; p = 0.03), 3.83 times more likely if households had no access to improved sources of drinking water (95% CI 1.12–13.1; p = 0.03), and 3.21 times more likely if households had income levels below $152/month (95% CI 1.40–7.35; p < 0.01). Although lower household income did not influence accessibility to improved drinking water sources, lower income households more likely lacked a refrigerator (odds ratio (OR) = 8.96; 95% CI 4.87–16.5; p < 0.01) and were also associated with mothers who had no primary education (OR = 5.44; 95% CI 1.71–17.3; p < 0.01). Mothers without primary education tended to think childhood diarrhea was not life threatening (OR = 10.8; 95% CI 3.45–33.6; p < 0.01), and mothers with such a perception were more likely wash their hands without soap after defecation (OR = 9.31; 95% CI 2.80–31.0; p < 0.01). In order to protect low-income children from diarrhea, it will be necessary to apply multiple health promotion efforts at both individual and community levels. Promoting mothers’ education is a key intervention for improving childhood health.