The objective of this study was to investigate the predictive value of Kruger's criteria for sperm morphology on intrauterine insemination (IUI) outcome. A total of 209 infertile patients underwent 244 IUI treatment cycles. These include 75 couples (80 cycles) with teratozoospermia and 134 couples (164 cycles) with unexplained infertility. The pregnancy rates per IUI cycle were 3.8 (1/26), 18.5 (10/54) and 29.9% (49/164) in patients with sperm morphology with <4, 4-9 and >9% normal forms, respectively, according to Kruger's criteria. A statistical difference in outcome was seen between couples with <4 and >9% normal forms (p = 0.005). Although the difference in pregnancy rates between those with 4-9 and <4% normal forms was not statistically significant, the pregnancy rate for those with 4-9% normal forms was acceptable and still higher than in those with <4% normal forms. Therefore, we suggest that IUI is a reasonable first-line therapy for patients with sperm morphology >4% normal forms, while couples with <4% normal forms should be advised to use in vitro fertilization with intracytoplasmic sperm injection instead of IUI.