The United Nations has declared a famine in two areas of southern Somalia as the region suffers the worst drought in more than half a century.
The UN said the humanitarian situation in southern Bakool and Lower Shabelle had deteriorated rapidly.
It is the first time that the country has seen famine in 19 years.
Meanwhile, the UN and US have said aid agencies need further safety guarantees from armed groups in Somalia to allow staff to reach those in need.
Al-Shabab, an al-Qaeda-affiliated group which controls large swathes of south and central Somalia, had imposed a ban on foreign aid agencies in its territories in 2009, but has recently allowed limited access.
An estimated 10 million people have been affected in East Africa by the worst drought in more than half a century. More than 166,000 desperate Somalis are estimated to have fled their country to neighbouring Kenya or Ethiopia.
The UN humanitarian co-ordinator for Somalia, Mark Bowden, said $300m (£186m) was needed to address the famine in the next two months.
The UK Secretary of State for International Development, Andrew Mitchell, said the response by many European and developed countries to the crisis in the Horn of Africa had been "derisory and dangerously inadequate".
"The fact that a famine has been declared shows just how grave the situation has become. It is time for the world to help," he said.
US Secretary of State Hillary Clinton said on Wednesday that Washington would provide an extra $28m in emergency aid to counter the famine.
She said the US had already provided $431m this year in emergency aid to the Horn of Africa, but that was "not enough".
Drought, conflict and poverty have now combined to produce the necessary conditions for famine.
Those conditions include more than 30% of children being acutely malnourished, and four children out of every 10,000 dying daily.
"Across the country nearly half of the Somali population - 3.7 million people - are now in crisis, of whom an estimated 2.8 million people are in the south," said a statement by the UN Office for the Co-ordination of Humanitarian Affairs for Somalia.
It said that the ongoing conflict had made it extremely difficult for agencies to access communities in the south, which are controlled by al-Shabab.
"If we don't act now, famine will spread to all eight regions of southern Somalia within two months, due to poor harvests and infectious disease outbreaks," Mr Bowden warned.
Save the Children's Sonia Zambakides told the BBC the situation in Somalia was shocking.
"I was talking to mothers with children, the children looked maybe nine months to one year old - the mothers were telling the children were three and four years old, so they are absolutely tiny."
She said some of the mothers had walked up to six days with no food to try to find help.
The BBC's Mohamed Mwalimu in Mogadishu, says he met a woman called Habiba at a camp set up for the drought victims in the capital who had walked 200km (125 miles) from her village near Buurhakaba city in south-west Somalia.
Her five children were with her, but the youngest ones - aged two years and five years - died on the way.
She said she abandoned their bodies along the roadside because she was too weak to dig graves.
The BBC's Africa correspondent Andrew Harding says the emotive word "famine" is used rarely and carefully by humanitarian organisations, and it is the first time since 1992 that the word has been applied to a situation in Somalia.
Meanwhile, the UN is calling for unhindered access to affected areas, saying that the security situation is hampering humanitarian efforts.
Adrian Edwards, a spokesman for the UN refugee agency, told reporters that the situation for aid workers in Somalia is "not what we want it to be".
"We do have a very minimal presence, and we have regular visits into the country, but we need significantly better access than we have at the moment to address an emergency of this scale," he said, speaking from Geneva.
The UN World Food Programme, which is trying to feed 1.5 million people, estimates that as many as a million people are in areas it cannot currently access.
"Once we have the assurances of security and the ability to have full access to deliver and distribute and monitor, then we will be prepared to go back in," Emilia Casella, a spokeswoman for the WFP, told the Associated Press news agency.
Johnnie Carson, the US assistant secretary of state for African affairs, said the US was assessing if they were seeing "real change" from al-Shabab, or whether the group planned to impose some kind of "taxation" on aid deliveries.
"Al-Shabab's activities have clearly made the current situation much worse," Mr Carson said.
"We call on all of those in south-central Somalia who have it within their authority to allow refugee groups and organisations to operate there to do so," he said.
Mr Bowden said discussions with al-Shabab about the safe distribution of food aid were taking place at a local level, and that responses were expected to differ depending on the locality.
In a separate development, Amnesty International says children in Somalia are being systematically recruited as child soldiers by militant groups such as al-Shabab.
Drawing on interviews from more than 200 Somalis who have fled their country, the rights group says some of those recruited are as young as eight years old.
The report says al-Shabab lures children with promises of money and mobile phones, but also carries out abductions.