Iron overload can cause insulin deficiency, but in some cases this may be insufficient to result in diabetes. We hypothesized that the protective effects of decreased iron would be more significant with increased beta-cell demand and stress. Therefore, we treated the ob/ob mouse model of type 2 diabetes with an iron-restricted diet (35 mg/kg iron) or with an oral iron chelator. Control mice were fed normal chow containing 500 mg/kg iron. Neither treatment resulted in iron deficiency or anemia. The low-iron diet significantly ameliorated diabetes in the mice. The effect was long lasting and reversible. Ob/ob mice on the low-iron diet exhibited significant increases in insulin sensitivity and beta-cell function, consistent with the phenotype in mouse models of hereditary iron overload. The effects were not accounted for by changes in weight or feeding behavior. Treatment with iron chelation had a more dramatic effect, allowing the ob/ob mice to maintain normal glucose tolerance for at least 10.5 wk despite no effect on weight. Although dietary iron restriction preserved beta-cell function in ob/ob mice fed a high-fat diet, the effects on overall glucose levels were less apparent due to a loss of the beneficial effects of iron on insulin sensitivity. Beneficial effects of iron restriction were minimal in wild-type mice on normal chow but were apparent in mice on high-fat diets. We conclude that, even at "normal" levels, iron exerts detrimental effects on beta-cell function that are reversible with dietary restriction or pharmacotherapy.