Diarrhea is caused by bacteria, viruses, or parasites, a major contributor to morbidity and mortality in children below 5 years of age. This randomized placebo-controlled trial evaluated effectiveness of folic acid supplementation for acute watery diarrhea (AWD) in children below 5 years of age. The study was conducted at the Department of Pediatric Medicine, Mayo Hospital, Lahore, and enrolled and randomized 324 pediatric patients in a 1:1 ratio to two groups. Children in Group A were given folic acid for 5 days while children in Group B were administered distilled water as a placebo for the same period. Clinical proformas were used to record and monitor the frequency of loose stools and stool consistency across both groups, on daily basis. Results of the study revealed that, compared with placebo group, folic acid supplementation did not significantly decrease frequency of loose stools, improve stool consistency, or shorten the duration of diarrhea. The average change in the number of loose stools from presentation to day 5 was similar in both groups [Group A: median = 7 (IQR = 4) versus Group B: Median = 7 (IQR = 4); p = 0.704]. The average duration of diarrhea was not significantly different between Group A [median = 4 (IQR = 2)] and Group B [median = 5 (IQR = 3)] (p = 0.530). The maximum duration of diarrhea was 11 days in Group A and 10 days in Group B. The study concluded that folic acid supplementation in AWD was not effective in reducing the frequency of loose stools, improving stool consistency, or decreasing the duration of illness among children under 5 years of age. Future studies should explore additional adjunctive therapies to help reduce diarrhea-related complications and mortality.