Iron is an essential micronutrient for early development, being involved in several cellular processes and playing a significant role in neurodevelopment. Prematurity may impact on iron homeostasis in different ways. On the one hand, more than half of preterm infants develop iron deficiency (ID)/ID anemia (IDA), due to the shorter duration of pregnancy, early postnatal growth, insufficient erythropoiesis, and phlebotomy losses. On the other hand, the sickest patients are exposed to erythrocytes transfusions, increasing the risk of iron overload under conditions of impaired antioxidant capacity. Prevention of iron shortage through placental transfusion, blood-sparing practices for laboratory assessments, and iron supplementation is the first frontier in the management of anemia in preterm infants. The American Academy of Pediatrics recommends the administration of 2 mg/kg/day of oral elemental iron to human milk-fed preterm infants from one month of age to prevent ID. To date, there is no consensus on the type of iron preparations, dosages, or starting time of administration to meet optimal cost-efficacy and safety measures. We will identify the main determinants of iron homeostasis in premature infants, elaborate on iron-mediated redox unbalance, and highlight areas for further research to tailor the management of iron metabolism.