Objective The World Health Organization recommends discharging children admitted to nutrition programs treating severe acute malnutrition, with a low mid-upper arm circumference (MUAC <115 mm) when weight gain is >15%. When this recommendation is followed, the most severely malnourished children receive a shorter treatment compared to children that are less severely malnourished. This study assesses whether using MUAC >125 mm as discharge criteria eliminates this effect. Methods and Findings Data from 753 children cured from a Médecins Sans Frontières outpatient nutrition program in Gedaref, North Sudan were analyzed. MUAC >125 mm was used as discharge criteria. Length of stay and percent weight gain of children were compared in relation to nutritional status on admission. Children with low MUAC on admission had a longer duration of treatment (p = 0.000) and also a higher percent weight gain (p = 0.000) than children with higher MUAC. Similar results with weight-for-height z-scores categories were shown with both duration of treatment (p = 0.000) and percent weight gain (p = 0.000). Conclusion This study shows that using MUAC as the discharge criteria eliminates the effect of shorter treatment in most severely malnourished children compared to least severely malnourished, as is observed with percent weight gain. The findings directly address the main concern that has been identified with the current WHO recommendation of using percent weight gain. MUAC could be used as discharge criteria, instead of percent weight gain, as having a longer duration of treatment and a higher percent weight gain for the most malnourished is highly desirable.