Anaemia is prevalent in South East Asia and Fe deficiency (ID) is considered to be the main cause, but the role of subclinical inflammation in the aetiology is uncertain. In the present study, we determined the influence of inflammation on the biomarkers of Fe status in women and children, and herein, we discuss the proportion of anaemia associated with ID. As part of the 2006 Lao People's Democratic Republic (The Lao PDR) National Nutrition Survey, blood collected from 482 young children and 816 non-pregnant women was analysed. Plasma ferritin, transferrin receptor (sTfR), Hb, C-reactive protein (CRP) and a-1-acid glycoprotein (AGP) concentrations were measured. ID was assessed using ferritin concentrations (< 12 (children) or < 15 (adults) mg/l), sTfR concentrations (< 8.3 mg/l) and body Fe stores (BIS < 0). Elevated CRP (< 5 mg/l) and/or AGP (. 1 g/l) concentrations were used to categorise inflammation status in order to correct the Fe biomarkers for inflammation. Inflammation was present in 14% of adults and 43% of children. Anaemia was present in 37.6% of both women (Hb concentrations,120 g/l) and children (Hb concentrations,110 g/l). Correcting ferritin concentrations for inflammation increased the prevalence of ID from 24.3 to 26% for women and from 18 to 21% for children (P, 0.001 for both). Ferritin concentrations were more helpful in detecting ID than sTfR concentrations or BIS, but regression analysis found that sTfr concentrations explained more of the variance in Hb concentrations in both women (20 %) and children (17 %) than ferritin concentrations (5 and 1.4%, respectively). Nevertheless, the total variance in Hb concentrations explained was only 26 and 18% in women and children, respectively, and other factors may be more important than ID in contributing to anaemia in The Lao PDR.