Background: Early diagnosis and prompt treatment is a cornerstone of malaria control. In India, artemisinin combination therapy (ACT) became the first-line treatment for falciparum malaria and rapid diagnostic test (RDTs) kits were recommended for use at the grass-root level in the new malaria treatment policy (2010). Odisha State contributes about one-fourth of the total Indian malaria burden and 40% of falciparum infection. The present study assessed the health system readiness to deploy RDTs and ACT for malaria control across the State. Methods. Data collection was carried out from February to July 2012. Five of Odisha's 30 districts were selected through stratified random sampling, with stratification based on the phased roll-out of ACT and RDT. Two administrative 'blocks' were selected randomly in each district and data collected through health facility, auxiliary nurse midwives (ANMs) and accredited social health activist (ASHAs) assessments. Key informant interviews were conducted with individuals involved in the implementation of the malaria control programme. Results: Of the 220 ANMs interviewed, 51.4% had been trained in malaria case management, including the use of ACT and RDT. A high proportion of ANM (80%) and AHSA (77%) had the necessary level of knowledge to be able to use RDT for malaria diagnosis. The proportion of ASHAs trained on malaria case management was 88.9% (209/235). However, 71% of ANM and 55% of ASHAs usually referred falciparum-positive patients to the health facility for treatment, the major reason for referral being the non-availability of drugs at the ANM and ASHA level. Conclusion: The relatively high level of knowledge about how to diagnose and treat malaria at the grass-root level was undermined by the poor availability of RDTs, ACT and primaquine tablets. This was associated with an unnecessarily high referral rate and potential delays in the treatment of this potentially life-threatening infection. Improvements in the supply chain for RDTs and ACT could dramatically enhance the effectiveness of malaria control in Odisha.