Newborn infants of poorly controlled insulin-dependent diabetic mothers demonstrate a redistribution of iron from serum and tissue stores into red blood cells. These changes may be due to increases in iron utilization during augmented Hb synthesis, which compensates for chronic intrauterine hypoxemia induced by prolonged fetal hyperinsulinemia. We tested this hypothesis by measuring plasma iron, total iron-binding capacity, percent iron-binding capacity saturation (total iron-binding capacity saturation), Hb concentration, total red cell Hb, and total red cell iron in the arterial blood of 11 chronically instrumented fetal sheep after 7-12 d of infusion with 15 U/day of insulin (n = 5) or placebo (n = 6). The insulin-infused fetal sheep had higher mean ± SD plasma insulin concentrations (448 ± 507 versus 11 ± 8 mU/L; p < 0.001) and lower arterial oxygen saturations (38 ± 7 versus 54 ± 9%;p < 0.02). The insulin-infused group had a lower mean plasma iron concentration (20.8 ± 10.9 versus 42.1 ± 14.7 µM/L; p < 0.02) and total iron-binding capacity saturation (36 ± 20 versus 64 ± 22%; p < 0.02) and a higher total red cell Hb (45.4 ± 8.7 versus 32.6 ± 8.8 g; p< 0.02) and total red cell iron content (154 ± 29 versus 111 ± 29 mg; p < 0.02) when compared with the placebo group. Seven to 12 d of intrauterine hyperinsulinemia decreases serum iron and increases total red cell iron, most likely by stimulating increased Hb synthesis in response to low arterial oxygen saturation. Hyperinsulemia may play a major role in the altered iron metabolism in newborn infants of diabetic mothers.