This is a cross-sectional study conducted from January to September 2004 in a group of school children aged 8 -10 years old. The schools and study subjects were selected using stratified systematic sampling technique. A total of 44 schools and 1100 subjects were selected from schools with iodinator and schools without iodinator. Samples collected were spot urine and drinking water. Dietary and iodised water consumption data were obtained from interviews. A total of 931 subjects (84.6%) responded; 558 (50.7%) from schools with iodinator and 373 (33.9%) from schools without iodinator. Results showed that in more than half (53.8%) of the schools with iodinators, mean water iodine level was below 25 microg/L. The study population in Terengganu was found to be mildly iodine deficient with an overall median urine iodine concentration (uIC) of 74 microg/L. Based on WHO criteria, 4.1% with uIC <20 microg/L (severe), 19.5% with uIC between 20-49 microg/L (moderate), 49.2% with uIC between 50-99 microg/L (mild) and 27.2% was iodine sufficient with uIC >100 microg/L. Majority of the study subjects were found to have high seafood intake (> 90%) and low in goitrogen food intake. This study suggests water iodinator system may not be a suitable method of supplying iodine and an alternative is needed in order to eradicate the iodine deficiency problem seen in some parts of Malaysia.