Background: The vicious cycle of poor nutrition status and impaired immune competence is particularly apparent in vulnerable populations, such as children living in urban slums. The gut microbiome likely modulates this cycle via nutrient absorption and processing, as well as early immune programming. The measles epidemic in India highlights the need to understand nutrition and the immune response in higher-risk populations. Our objectives were to: 1) determine the burden and correlates of undernutrition; 2) characterize the gut microbiome and its links with dietary intakes; and 3) examine micronutrient status and measles antibody titer in children under 2 years of age living in urban slums of Mumbai. Methods: Sociodemographic, anthropometry, dietary and clinical data; and biological samples were collected from children participating in a parent randomized controlled trial. Fecal samples (rectal swabs) DNA was 16S rRNA sequenced, and measles antibody titers and micronutrient biomarkers were quantified from whole blood. The screening pool of participants were included in two studies; the randomized pool was included in a third study. Results: The burden of undernutrition (poor growth, anemia, and micronutrient deficiency) was high in this population. Low birth weight, short maternal stature, and less maternal education were associated with a higher risk for poor growth and anemia. Proteobacteria dominated the gut microbiome and dietary intakes were associated with differences in gut microbiota diversity, relative abundance, and community structure. Deficiency in ferritin and vitamins D, A, and B12 were associated with lower measles immunoglobulin G (IgG) antibody titers at baseline and after follow-up. The prevalence of protective antibody level was 58% and 73% at baseline and endpoint, respectively, despite 72% reporting of measles vaccination at age 9.7 months. Conclusions: Childhood undernutrition remains a persistent issue around the world particularly in vulnerable settings such as urban slums, with ramifications on gut microbiota and immune function. These studies show that the need to target undernutrition, immune response, and gut microbiota health particularly in urban slums cannot be overemphasized, considering that over 60 million people in India alone live in slum settings.