BACKGROUND: Retail drug shops play a significant role in managing pediatric fevers in rural areas in Uganda. Targeted interventions to improve drug seller practices require understanding of the retail drug shop market and motivations that influence practices. This study aimed at describing the operational environment in relation to the Uganda National Drug Authority guidelines for setup of drug shops; characteristics, and dispensing practices of private retail drug shops in managing febrile conditions among under-five children in rural western Uganda. METHODS: Cross sectional survey of 74 registered drug shops, observation checklist, and 428 exit interviews using a semi-structured questionnaire with care-seekers of children under five years of age, who sought care at drug shops during the survey period. The survey was conducted in Mbarara and Bushenyi districts, South Western Uganda, in May 2013. RESULTS: Up to 90 and 79% of surveyed drug shops in Mbarara and Bushenyi, largely operate in premises that meet National Drug Authority requirements for operational suitability and ensuring medicines safety and quality. Drug shop attendants had some health or medical related training with 60% in Mbarara and 59% in Bushenyi being nurses or midwives. The rest were clinical officers, pharmacists. The most commonly stocked medicines at drug shops were Paracetamol, Quinine, Cough syrup, ORS/Zinc, Amoxicillin syrup, Septrin® syrup, Artemisinin-based combination therapies, and multivitamins, among others. Decisions on what medicines to stock were influenced by among others: recommended medicines from Ministry of Health, consumer demand, most profitable medicines, and seasonal disease patterns. Dispensing decisions were influenced by: prescriptions presented by client, patients' finances, and patient preferences, among others. Most drug shops surveyed had clinical guidelines, iCCM guidelines, malaria and diarrhea treatment algorithms and charts as recommended by the Ministry of Health. Some drug shops offered additional services such as immunization and sold non-medical goods, as a mechanism for diversification. CONCLUSION: Most drug shops premises adhered to the recommended guidelines. Market factors, including client demand and preferences, pricing and profitability, and seasonality largely influenced dispensing and stocking practices. Improving retail drug shop practices and quality of services, requires designing and implementing both supply-side and demand side strategies.

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