The objective of this study was to assess the impact of caregiving arrangement on the iron and folate status of infants and toddlers reared at home or enrolled in centre-based, independent home, or licensed home care. One hundred and eighty-nine children aged 2 to 29 months were assessed 1 month prior to child care entry and at 6 months after entry into child care. Dietary (24-hour records), anthropometric (height, weight, head circumference) and biochemical (red blood cell folate, hematocrit, transferrin, and serum ferritin concentrations) methods were used to assess nutritional status. Frequency of illness was determined by a series of telephone interviews. Median intake of nutrients exceeded Canadian recommendations, regardless of care arrangement. Fifteen of 65 children had hematocrit values below age-specific cutoffs at the 6-month post-entry to child care visit. Children were frequently taken to obtain medical advice (average of 4 to 6 times during the study period) and 75% of subjects were prescribed at least one course of antibiotics. In conclusion, infants and toddlers in this study were generally well nourished, regardless of child care arrangement; however, iron status may remain an issue in this sample of infants and toddlers.