The prevalence of nutritional iron deficiency anemia in infants and toddlers has declined dramatically since 1960. However, satisfaction with this achievement must be tempered because iron deficiency anemia in infants and toddlers is associated with long-lasting diminished mental, motor, and behavioral functioning. Additionally, the prevalence of iron deficiency anemia in one- to three-year-old children seems to be increasing. The exact relationship between iron deficiency anemia and the developmental effects is not well understood, but these effects do not occur until iron deficiency becomes severe and chronic enough to produce anemia. At that point, treatment with iron can reverse the anemia and restore iron sufficiency, yet the poorer developmental functioning appears to persist. Therefore, intervention should focus on the primary prevention of iron deficiency. In the first year of life, measures to prevent iron deficiency include completely avoiding cow's milk, starting iron supplementation at four to six months of age in breastfed infants, and using iron-fortified formula when not breastfeeding. Low-iron formula should not be used. In the second year of life, iron deficiency can be prevented by use of a diversified diet that is rich in sources of iron and vitamin C, limiting cow's milk consumption to less than 24 oz per day, and providing a daily iron-fortified vitamin. All infants and toddlers who did not receive primary prevention should be screened for iron deficiency. Screening is performed at nine to 12 months, six months later, and at 24 months of age. The hemoglobin/hematocrit level alone detects only patients with enough iron deficiency to be anemic. Screening by erythrocyte protoporphyrin or red-cell distribution width identifies earlier stages of iron deficiency. A positive screening test is an indication for a therapeutic trial of iron, which remains the definitive method of establishing a diagnosis of iron deficiency.