Global food price fluctuations have increased substantially over the last decade leading to significantly high prices within the developing countries. Tanzania is not an exception, since the recent food price surges made it one of the most affected countries in SSA. This paper investigates the impact of the recent food price crisis on the quantity and quality of the dietary composition of rural and urban households in Tanzania, since excessive food price movements are likely to harm most vulnerable households. Results using household data from the 2008/09, 2010/11 and 2012/13 waves of the Tanzania National Panel Survey show that urban households are more vulnerable than rural households to food price shocks. Moreover, we find evidence that price movements negatively affected also the quality of the diet, in particular, looking at the regional distribution, fats, calcium and vitamin A were the most cutback macro and micronutrients. Short-term policy measures, such as food fortification or micro-nutrient supplementation programmes are needed to strengthen diet diversity and micronutrient intake of Tanzanian vulnerable households and to improve the ability of poor to cope better with food price instability.