To ascertain the association of BMI and obesity with short stature, a cross-sectional telephone survey was conducted in 2006, using a multilevel approach, adjusting for individual- and city-level measures of socio-economic status. The study probabilistic sample consisted of 54 369 adults (>18 years) living in households with access to telephone lines in each urban area of the twenty-six Brazilian state capitals and federal district. Odds of being currently obese and obese at age 20 years were compared between short stature individuals (5th percentile) and those with normal stature. After controlling for individual- and city-level sociodemographic characteristics and behaviours, high BMI was strongly associated with short stature individuals (P = 0·001). Among short stature women the adjusted OR of being obese was 3·0 (95 % CI 2·2, 4·2) compared with those with stature greater than the 5th percentile. Among men this adjusted OR was 2·0 (95 % CI 1·5, 2·6). When comparisons were made for BMI at age 20 years the OR were even larger (6 for men and 8 for women). Despite the growing body of evidence that environmental factors such as poor food choices and physical inactivity are the main determinants of the worldwide obesity epidemic, the greater difference in BMI and prevalence of obesity in the Brazilian capitals was explained mainly by individual factors. We found a strong association between obesity and short stature after adjustment for diet, physical activity, and many environmental factors. Intra- and inter-generational consequences of undernutrition are an alternative explanation for the regional disparities in obesity in Brazil.