Several reviews and meta-analyses have examined the effects of iodine on mental development. None focused on young children, so they were incomplete in summarizing the effects on this important age group. The current systematic review therefore examined the relationship between iodine and mental development of children 5 years old and under. A systematic review of articles using Medline (1980-November 2011) was carried out. We organized studies according to four designs: (1) randomized controlled trial with iodine supplementation of mothers; (2) non-randomized trial with iodine supplementation of mothers and/or infants; (3) prospective cohort study stratified by pregnant women's iodine status; (4) prospective cohort study stratified by newborn iodine status. Average effect sizes for these four designs were 0.68 (2 RCT studies), 0.46 (8 non-RCT studies), 0.52 (9 cohort stratified by mothers' iodine status), and 0.54 (4 cohort stratified by infants' iodine status). This translates into 6.9 to 10.2 IQ points lower in iodine deficient children compared with iodine replete children. Thus, regardless of study design, iodine deficiency had a substantial impact on mental development. Methodological concerns included weak study designs, the omission of important confounders, small sample sizes, the lack of cluster analyses, and the lack of separate analyses of verbal and non-verbal subtests. Quantifying more precisely the contribution of iodine deficiency to delayed mental development in young children requires more well-designed randomized controlled trials, including ones on the role of iodized salt.