Iron deficiency (ID) is a major public health problem worldwide among children aged 0-12 months. Several factors seem to contribute to the iron-deficient state in infancy, including insufficient antenatal and neonatal iron supplementation, exclusive breastfeeding, and early umbilical cord clamping after birth. The most concerning complications of ID, except for anemia, are related to altered long-term neurodevelopment. Clinical studies have shown a negative impact of ID anemia on fetal and neonatal behavior including impairments of motor maturity, autonomic response, memory/learning, and mood. ID-induced defects during infancy seem to persist later in life, even after ID treatment. The underlying mechanisms involve dysfunctional myelination, neurotransmission alterations, and altered synaptogenesis and/or dendritogenesis. The purpose of the present review is to summarize these mechanisms and to provide recommendations for future clinical research in the field.