Stunting is common in young children in developing countries, and is associated with increased morbidity, developmental delays, and mortality. Its complex pathogenesis likely involves poor intrauterine and postnatal nutrition, exposure to microbes, and the metabolic consequences of repeated infections. Acquired enteropathy affecting both gut structure and function likely plays a significant role in this outcome, especially in the first few months of life, and serve as a precursor to later interactions of infection and malnutrition. However, the lack of validated clinical diagnostic criteria has limited the ability to study its role, identify causative factors, and determine cost-effective interventions. This review addresses these issues through a historical approach, and provides recommendations to define and validate a working clinical diagnosis and to guide critical research in this area to effectively proceed. Prevention of early gut functional changes and inflammation may preclude or mitigate the later adverse vicious cycle of malnutrition and infection.