This study was aimed to examine the role of iron in causing periventricular white matter (PWM) damage following a hypoxic injury in the developing brain. Along with iron, the expression of iron regulatory proteins (IRPs) and transferrin receptor (TfR), which are involved in iron acquisition, was also examined in the PWM by subjecting 1-d-old Wistar rats to hypoxia. Apart from an increase in iron levels in PWM, Perls' iron staining showed an increase of intracellular iron in the preponderant amoeboid microglial cells (AMCs) in the tissue. In response to hypoxia, the protein levels of IRP1, IRP2, and TfR in PWM and AMCs were significantly increased. In primary microglial cultures, administration of iron chelator deferoxamine reduced the generation of iron-induced reactive oxygen and nitrogen species and proinflammatory cytokines such as tumor necrosis factor-α and interleukin-1β. Primary oligodendrocytes treated with conditioned medium from hypoxic microglia exhibited reduced glutathione levels, increased lipid peroxidation, upregulated caspase-3 expression, and reduced proliferation. This was reversed to control levels on treatment with conditioned medium from deferoxamine treated hypoxic microglia; also, there was reduction in apoptosis of oligodendrocytes. The present results suggest that excess iron derived primarily from AMCs might be a mediator of oligodendrocyte cell death in PWM following hypoxia in the neonatal brain.