OBJECTIVE Excessive iodine intake may lead to thyroid dysfunction, which may be particularly harmful during pregnancy and lactation. The main objective was to describe iodine status and the prevalence of thyroid dysfunction among lactating women in areas with high iodine (HI) and very high iodine (VHI) concentrations in drinking water. METHODS A cross-sectional survey was performed among 111 lactating women in the Saharawi refugee camps, Algeria. Breast milk iodine concentration (BMIC), urinary iodine concentration (UIC) and the iodine concentration in the most commonly consumed foods/drinks were measured. A 24-h dietary recall was used to estimate iodine intake. Thyroid hormones and antibodies were measured in serum. RESULTS Median UIC, BMIC and iodine intake across both areas was 350 μg/L, 479 μg/L and 407 μg/day, respectively. In multiple regression analyses, we discovered that being from VHI area was associated with higher UIC and BMIC. BMIC was also positively associated with iodine intake. Thyroid dysfunction and/or positive thyroid antibodies were found in 33.3% of the women, of which 18.9% had hypothyroidism and 8.1% had hyperthyroidism and 6.3% had positive antibodies with normal thyroid function. Elevated thyroid antibodies were in total found in 17.1%. We found no difference in distribution of thyroid dysfunction or positive antibodies between HI and VHI areas. BMI, BMIC and elevated thyroglobulin (Tg) predicted abnormal thyroid function tests. CONCLUSIONS The high prevalence of thyroid dysfunction may be caused by excessive iodine intake over several years.