Diabetes mellitus is characterized by increased methylglyoxal (MG) production. The aim of the present study was to investigate the role of iron in the cellular and molecular effects of MG. A red blood cell (RBC) model and L-arginine were used to study the effects of MG in the absence and presence of iron. Intracellular free radical formation and calcium concentration were measured using dichlorofluorescein and Fura-2-AM, respectively. Effects of MG were compared to the effect of ferrous iron. Reaction of L-arginine with MG was investigated by electron spin resonance (ESR) spectroscopy and by a spectrophotometric method. MG caused an iron dependent oxidative stress in RBCs and an elevation of the intracellular calcium concentration due to formation of reactive oxygen species. Results of co-incubation of MG with ferrous iron in the RBC model suggested an interaction of MG and iron; one interaction was a reduction of ferric iron by MG. A role of iron in the MG-L-arginine reaction was also verified by ESR spectroscopy and by spectrophotometry. Ferric iron increased free radical formation as detected by ESR in the MG-L-arginine reaction; however, ferrous iron decreased it. The reaction of MG with L-arginine yielded a brown product as detected spectrophotometrically and this reaction was catalyzed at a lower rate with ferric iron but at a higher rate with ferrous iron. These data suggest that MG causes oxidative stress in cells, which is due at least in part to ferric iron reduction by MG and to the modification of amino acids e.g. L-arginine by MG, which is catalyzed by iron redox cycling.