The relation between hemodilution or anemia of pregnancy and fetal development was studied in 350 pregnant women who were delivered of full term singleton infants and were without any complications except iron deficiency anemia. The mean birth weight of the infants whose mother's hematocrit levels were 28.0-31.9% in 28-32 weeks' gestation was significantly higher than those of infants whose mother's hematocrits were 32.0-35.9% and 36.0-39.9%. There was also observed the same relation between birth weights and mother's hematocrits in 36-37 weeks' gestation. The incidence of small for dates infants was not significantly different between pregnant with different hematocrits. The iron deficiency anemia of pregnancy had no adverse effects on fetal development. It was suggested that hemodilution of pregnancy had an important physiological role in improving placental microcirculation to accelerate fetal development.