We evaluated the role of initial iron stores on iron accumulation during recovery from severe edematous protein‐energy malnutrition in children. Twenty‐six preschool children were divided in two groups according to their initial iron reserves, as estimated from serum ferritin concentration, using a cutoff criterion of 30 ng/ml. The low ferritin (LF) group had a mean serum ferritin level of 12 ± 8 ng/dl, and the high ferritin (HF) group, 86 ± 32 ng/dl. Both groups had similar degrees of malnutrition and of anemia, as defined by hemoglobin concentration. All children received an adequate therapeutic diet and 60 mg iron daily as ferrous sulfate. The recovery of biochemical and anthropometric indicators of nutritional status, as well as of hemoglobin concentration, was similar in both groups. On the contrary, the LF group showed a marked increase in serum ferritin concentration from the onset of treatment, whereas the HF group had a net decline in this parameter by 30 days, and a stable level thereafter. The difference in serum ferritin concentration between groups was maintained until day 60, and both groups ended the study (90 days) with similar levels. Estimation of the utilization of exogenous iron from changes in total‐body iron during the first 60 days of recovery showed the LF group to retain an average of 9.3% of iron intake, whereas the HF group retained only 1.4%. These results confirm that similar degrees of anemia in severe malnutrition can be associated with markedly different iron reserves, and suggest that the homeostatic regulation of intestinal iron absorption by the storage iron pool may produce a lower utilization of oral iron supplements in malnourished children with high iron reserves at the onset of treatment.