Thirty-five infants weighing less than 1500 g at birth were fed four commercial formulas (A-D) varying in polyunsaturated fatty acid composition (32 per cent linoleic acid in A and B and 12 per cent linoleic acid in C and D) and in iron content (smaller than 1.0 in A and B; 12 to 12 mg per liter in B and D). Infants receiving formula B showed significantly lower hemoglobins (p smaller than 0.01) and higher reticulocyte counts (p smaller than 0.005) than infants fed the other three formulas. Infants receiving the two formulas with higher concentrations of unsaturated fatty acids (A and B) showed significantly greater hydrogen-peroxide-induced hemolysis (p smaller than 0.001) than those given diets containing lower amounts. Infants in groups A and B also had lower serum tocopherol concentrations. Infant red-cell membranes are altered by the increased amounts of polyunsaturated fatty acids and iron in the diet. It appears that the development of vitamin E deficiency anemia occurs in infants receiving iron supplementation.