BACKGROUND: On the 26th December 2004 the Asian tsunami devastated the Sri Lankan coastline. More than two years later, over 14,500 families were still living in transitional shelters. This study compares the health of the internally displaced people (IDP), living in transitional camps with those in permanent housing projects provided by government and non-government organisations in Sri Lanka. METHODS: This study was conducted in seven transitional camps and five permanent housing projects in the south west of Sri Lanka. Using an interviewer-led questionnaire, data on the IDPs' self-reported health and housing conditions were collected from 154 participants from transitional camps and 147 participants from permanent housing projects. Simple tabulation with non-parametric tests and logistic regression were used to identify and analyse relationships between housing conditions and the reported prevalence of specific symptoms. RESULTS: Analysis showed that living conditions were significantly worse in transitional camps than in permanent housing projects for all factors investigated, except 'having a leaking roof'. Transitional camp participants scored significantly lower on self-perceived overall health scores than those living in housing projects. After controlling for gender, age and marital status, living in a transitional camp compared to a housing project was found to be a significant risk factor for the following symptoms; coughs OR: 3.53 (CI: 2.11-5.89), stomach ache 4.82 (2.19-10.82), headache 5.20 (3.09-8.76), general aches and pains 6.44 (3.67-11.33) and feeling generally unwell 2.28 (2.51-7.29). Within transitional camp data, the only condition shown to be a significant risk factor for any symptom was household population density, which increased the risk of stomach aches 1.40 (1.09-1.79) and headaches 1.33 (1.01-1.77). CONCLUSION: Internally displaced people living in transitional camps are a vulnerable population and specific interventions need to be targeted at this population to address the health inequalities that they report to be experiencing. Further studies need to be conducted to establish which aspects of their housing environment predispose them to poorer health.