Purpose: The level of mother's health knowledge influences not only her health, but also significantly predicts her children's health and medical care, and spending on medical care. This relationship has not yet been empirically assessed in India. The purpose of this paper is to measure the level of health knowledge of mothers in India and its association with the short-term illness in their children, medical care and medical care expenditure. Design/Methodology/ Approach: The authors used data from India Human Development Survey, 2004-2005. An index of "health knowledge" was constructed by using factor analysis. Multivariate binary logistic regression, multinomial logistic regression and multiple classification analysis were employed to analyze the relationship between mother's health knowledge and child illness. Pearson's ?2 test and ANOVA test were used to estimate levels of statistical significance in bivariate analyses. Findings: The results revealed that children of mothers with medium and high-health knowledge were significantly less likely to have short-term illness (OR = 0.390, p <0.01 and OR = 0.543, p <0.01) than those children whose mothers had no or low-health knowledge (OR = 1.00, p <0.01) cutting across all background characteristics. Similarly, the attainment of modern medical care for short-term illness of children was nearly two times greater (OR = 1.97, p <0.05) in mothers with higher health knowledge as compared to mothers with no or low-health knowledge (OR = 1.00, p <0.01). The results also showed that mothers with higher health knowledge spent more on medical care for their children's short-term illness than mothers with no and low-health knowledge. Practical Implications: The findings suggested a significant effect of mother's health knowledge on the prevalence of short-term illness among their children, medical care and expenditure on the medical care. Appropriate health knowledge for women is crucial to the wellbeing of their children. Besides, social equity in terms of the distribution of facilities, to gain health knowledge and medical care, are essential to be established in India. Originality/Value: To the knowledge, this study is the first attempt to measure the health knowledge of women in reproductive age and its association with the prevalence of short-term illness, medical care and medical expenditure of their children in India. In general, a health knowledge index could be a significant composite predictor of the health in a population.