Iodine supplementation before pregnancy in iodine-deficient women prevents cretinism and neuromotor deficits in their offspring. It is unclear whether iodine supplementation benefits cognitive function in iodine-deficient school-aged children. We therefore conducted a double-blind, randomized, controlled trial of the effects of iodized poppy seed oil (Lipiodol) on cognitive and motor function and weight gain of iodine-deficient school children. The study was conducted with 305 children in grades 1 and 2 from 10 primary schools in two iodine-deficient areas in Bangladesh. The children were stratified by school and grade and randomly assigned to receive 400 mg of oral Lipiodol or a placebo. All children were given a battery of cognitive and motor function tests and had their weights, serum thyroxine (T4) and thyroid-stimulating hormone (TSH) and urinary iodine levels measured before and 4 mo after the intervention. On enrollment, both groups were moderately iodine deficient (median urinary iodine values: placebo group = 3.3 micromol/L, n = 148; iodine group = 3.1 micromol/L, n = 152; goiter prevalence in both groups >95%). However, their T4 and TSH levels were within the normal range. After 4 mo, there was a significant treatment effect on urinary iodine levels (P < 0.0001), but the levels of the treated group were still below normal (median = 7.9 micromol/L). No significant differences were found in T4 and TSH levels, weight gain, cognitive or motor function. The findings suggest that Lipiodol supplementation in moderately iodine-deficient children with normal T4 levels is unlikely to benefit their cognitive function. However, it remains possible that other iodine preparations may have benefits.