Because chronic hypoxemia causes a redistribution of iron from serum and storage pools into an expanding erythrocyte mass, and because infants of diabetic mothers are often hypoxemic in utero and have a high prevalence of polycythemia at birth, we studied iron distribution in 43 term infants of diabetic mothers. Twenty-four infants were at an appropriate size for gestational age; 19 were large for gestational age. At birth, 28 infants (65%) had abnormal serum iron profiles; eight had decreased ferritin concentrations only (stage 1), nine had decreased ferritin and increased total iron-binding capacity values (stage 2), and 11 had these serum findings plus elevated free erythrocyte protoporphyrin concentrations (stage 3). The hypoglycemic infants who were large for gestational age (n = 14) had a higher prevalence of abnormal iron profiles than euglycemic infants who were appropriate in size for gestational age (n = 20; 93% vs 50%; p = 0.009). Progressively abnormal iron profiles were associated with higher glycosylated fetal hemoglobin values, greater degrees of macrosomia, increased hemoglobin and erythropoietin concentrations, and increased erythrocyte/storage iron ratios. Erythropoietin concentrations were inversely linearly correlated with serum iron values (n = 32, r = -0.54; p = 0.003). The combined erythrocyte and storage iron pools were significantly lower in infants with abnormal iron values whose mothers were diabetic, particularly in infants of women with confirmed diabetic vasculopathy. We speculate that these findings are likely due to (1) increased fetal iron utilization during compensatory hemoglobin synthesis in response to chronic hypoxemia and (2) reduced iron transfer during late gestation complicated by diabetes.