Whereas the consequences of extremes in iodine intake are well described, much less is known about the effect of more moderate variations in maternal iodine intake on fetal thyroid function. The present study performed in Denmark with mild to moderate iodine deficiency dealt with the effect of maternal iodine supplementation on thyroid function in the mother at term and in the fetus/neonate. Serum was collected consecutively from pregnant women at term (n = 144) and from cord blood (n = 139). Forty-nine women had a regular intake of vitamin and mineral tablets with iodine (150 microg/day) during pregnancy, and 95 took no artificial iodine supplementation. Iodine supplementation (+I) induced opposite variations in thyroid function in the mother and the fetus. In +I mothers, TSH was 7.6% lower than in mothers with no supplementation (P < 0.05). In cord blood, on the contrary, TSH was 27.3% higher in the +I group (P < 0.05). The variations were caused by opposite shifts in TSH frequency distribution in mothers and neonates. The association between iodine supplementation and high serum TSH in the neonates was further substantiated by an inverse correlation between thyroglobulin and TSH in cord blood (P < 0.001), whereas no specific pattern was observed in the mothers. High serum thyroglobulin was a marker of low iodine intake in both mothers and neonates. The results suggest that the fetal thyroid, at least in areas of mild iodine deficiency, is more sensitive to the inhibitory effect of iodine than hitherto anticipated.