Diarrhea causes approximately 500,000 deaths annually among children under five globally, with sub-Saharan Africa disproportionately affected. In Rwanda, prevalence remains 12–15% among under-fives despite improvements in water and sanitation, and evidence on the population-level effectiveness of household water treatment (HWT) remains inconsistent. We analyzed RDHS 2019–2020 data from 7,756 weighted children under five using descriptive statistics, chi-square tests, and multivariable logistic regression, with results reported as adjusted odds ratios (AORs) and 95% confidence intervals (CIs). The overall prevalence of diarrhea was 14.1%; HWT coverage was 33.6%. Diarrhea prevalence was lower in households practicing water treatment (12.5% vs. 15.0%; OR = 0.81; 95% CI: 0.70–0.93; p = 0.003); however, this association was not significant after multivariable adjustment (AOR = 1.02; 95% CI: 0.87–1.20; p = 0.786). Soap availability was the only WASH variable independently protective (AOR = 0.75; 95% CI: 0.63–0.89; p = 0.001). Child age 12–23 months (AOR = 2.086; 95% CI: 1.66–2.61, p < 0.001) and maternal education were strong predictors. Regionally, protective HWT effects were observed only in Kigali and the Southern Province. HWT was not independently associated with childhood diarrhea nationally. Soap availability, maternal education, and child age were the strongest modifiable predictors. Integrated WASH interventions combining handwashing promotion, maternal education, and region-targeted strategies are recommended.