Iron deficiency is widespread in infants and young children, especially in developing countries. Animal models provide convincing evidence that, despite iron repletion, iron deficiency during the brain growth spurt alters metabolism and neurotransmission, myelination, and gene and protein profiles. In the human, there is compelling evidence that 6- to 24-month-old infants with iron-deficiency anemia are at risk for poorer cognitive, motor, social-emotional, and neurophysiologic development in the short- and long-term outcome. In contrast to inconsistent developmental effects of iron therapy for iron-deficient infants, recent large, randomized trials of iron supplementation in developing countries uniformly show benefits of iron, especially on motor development and social-emotional behavior. These results indicate that adverse effects can be prevented and/or reversed with iron earlier in development or before iron deficiency becomes severe or chronic. New findings also point to the need for more attention to the developmental effects of prenatal iron deficiency.