Severe iron deficiency anemia remains a continuing major health hazard among inner city children in Los Angeles. Over a 24-month period, 60 children in whom hemoglobin values were below 7 grams per dl were admitted to hospital; 11 (18 percent) of them were in overt congestive heart failure. Contrary to the popular conceptions, two thirds of the anemic children were undernourished, approximating the 16th percentile for weight on the Iowa growth chart, and the frequency of premature birth was not greater than in the general population. There were no deaths in this series. A management protocol which included partial exchange transfusion of children in congestive heart failure and supportive transfusion for children with hemoglobin levels below 5 grams per dl was employed.