Since 1997, discount vouchers for insecticide-treated nets (ITNs) have been used in two rural districts of southern Tanzania as a way to target subsidies to children under 5 years and pregnant women. We assessed appropriate use and misuse of discount vouchers through a follow-up study of 104 randomly selected vouchers. We traced these vouchers from their original issue in mother-and-child health (MCH) clinics through to being redeemed at a sales agent. We found that all vouchers that reached the target population (100%, 56/56) were used to buy an ITN. Moreover, 94% of the ITNs bought with vouchers were used by those intended, women and children under 5 years. However, up to 48% (50/104) of the vouchers had been misused at the clinics that issued them. Nevertheless, large-scale misuse occurred only at three of 21 clinics. Although most women slept under a net while pregnant, the use of voucher-subsidized ITNs during pregnancy was low despite widespread knowledge of the scheme. Parents had apparently decided to buy the subsidized ITNs once the child was born and not during pregnancy. Importantly, in 20% of households the only existing net had been bought with a voucher. Our findings suggest that vouchers are properly used by the target population, and that to minimize voucher leakage, control measures are needed at MCH clinics and to a certain extent for commercial sales agents. Increased awareness among the whole community on the right to receive a discount voucher may also help to control misuse at health facilities.