High erase sensitivity is observed in heavily reduced crystals of Fe-doped LiNbO(3). Only 12 mJ/cm(2) of incident 4880-A radiation erases a hologram, nearly 3 orders of magnitude less energy than previously required. However, the maximum diffraction efficiency that can be reached in these crystals is substantially reduced. These results are shown to be consistent with an extremely low density of Fe(3+) ions. The crystals are resistant to optical scattering effects usually observed in Fe-doped LiNbO(3).