Objective. Assess the effectiveness on iron deficiency and anemia in young children of a large-scale program that provides iron fortified milk at a subsidized price to low income households. Design, Setting, and Sampling. A randomized effectiveness study in 12 milk distribution clusters randomly selected from 542 clusters in 4 States in Mexico. Selected clusters were randomly assigned to receive iron-fortified milk FM, N=7) or non-fortified milk (NFM, N=5). Over 95% program beneficiaries with children 12-30 mo of age in the 12 clusters (490 in FM and 275 in NFM) were enrolled in the FM and NFM interventions and participated in a baseline survey. 635 children (405 in FM and 230 in NFM) and 584 children (371 in FM and 213 in NFM) completed the 6 and 12-mo follow-up surveys, respectively. Intervention: A daily portion of FM contained 5.28 mg of iron, 48 mg of sodium ascorbate and other added micronutrients. The FM and NFM were distributed to beneficiaries at a subsidized price in Milk Distribution Centers in the 12 clusters.