Abstract Background Infectious diseases associated with poor sanitation such as diarrhoea, intestinal worms, trachoma and lymphatic filariasis continue to cause a large disease burden in low income settings and contribute substantially to child mortality and morbidity. Obtaining health impact data for rural sanitation campaigns poses a number of methodological challenges. Here we describe the design of a village-level cluster-randomised trial in the state of Orissa, India to evaluate the impact of an ongoing rural sanitation campaign conducted under the umbrella of India’s Total Sanitation Campaign (TSC).We randomised 50 villages to the intervention and 50 villages to control. In the intervention villages the implementing non-governmental organisations conducted community mobilisation and latrine construction with subsidies given to poor families. Control villages receive no intervention. Outcome measures include (1) diarrhoea in children under 5 and in all ages, (2) soil-transmitted helminth infections, (3) anthropometric measures, (4) water quality, (5) number of insect vectors (flies, mosquitoes), (6) exposure to faecal pathogens in the environment. In addition we are conducting process documentation (latrine construction and use, intervention reach), cost and cost-effectiveness analyses, spatial analyses and qualitative research on gender and water use for sanitation. Results Randomisation resulted in an acceptable balance between trial arms. The sample size requirements appear to be met for the main study outcomes. Delays in intervention roll-out caused logistical problems especially for the planning of health outcome follow-up surveys. Latrine coverage at the end of the construction period (55%) remained below the target of 70%, a result that may, however, be in line with many other TSC intervention areas in India. Conclusion We discuss a number of methodological problems encountered thus far in this study that may be typical for sanitation trials. Nevertheless, it is expected that the trial procedures will allow measuring the effectiveness of a typical rural sanitation campaign, with sufficient accuracy and validity.