Accumulating evidence suggests that alcohol, hepatitis C virus infection, steatosis with obesity, and insulin resistance are accompanied by iron overload states. Phlebotomy and oral iron chelators are effective treatments for these conditions and for hemochromatosis. However, the mechanisms by which iron depletion improves clinical factors remain unclear. We examined the effect of iron depletion in a model of type 2 diabetes, Otsuka Long-Evans Tokushima Fatty (OLETF) rats. Age-matched Long-Evans Tokushima Otsuka (LETO) rats were used as controls for all experiments. Iron restriction was performed by eliminating iron in the diet from 15 wk of age or by phlebotomy. Phlebotomy was commenced at 29 wk of age by removing 4 and 3 ml of blood from the tail vein every week in OLETF and LETO rats, respectively. Rats were euthanized at 43 wk of age, and detailed analyses were performed. The plasma ferritin concentration was markedly higher in OLETF rats and decreased in iron-deficient (ID) diet and phlebotomy rats. Hemoglobin A(1c) (Hb A(1c)) was decreased significantly in OLETF rats fed the ID diet and in the phlebotomy group. Increased levels of triglycerides, glucose, free fatty acids, and total cholesterol were found in ID OLETF rats. Plasma, liver, and pancreas lipid peroxidation and hepatic superoxide production decreased in both groups. Pancreatic fibrosis and insulin levels improved in both groups of OLETF rats. Pancreatic levels of peroxisome proliferator-activated receptor-beta/delta (PPARbeta/delta) ligands and hypoxia-inducible factor (HIF)-1alpha were decreased significantly in OLETF rats. These factors were normalized in both rats fed ID and phlebotomy groups of OLETF rats. In conclusion, iron depletion improved diabetic complications by inhibition of oxidative stress and TGFbeta signal pathways and the maintenance of pancreatic PPARbeta/delta and HIF-1alpha pathways.