In Bangladesh, groundwater, the principal source of drinking water, contains predominantly high levels of iron. Drinking groundwater is associated with good iron status in populations. Against this backdrop, iron supplementation is often associated with side effects, which reduces its intake compliance. However, the level of iron in groundwater is not consistent, and low levels exist in many areas of the country. In the present study, we examined the role of groundwater with a low concentration of iron in the prevention of anemia in Bangladeshi children. In 2018, a cross-sectional study was conducted in Bangladesh among children aged 2-5 years (n = 122) who drank groundwater containing a low level of iron (0-<2 mg/L). The combined intake of iron was calculated from the key sources-diet, groundwater, and the simulated intake of MNPs. The intakes of iron were compared against the standard reference intake. The children's hemoglobin levels were measured using a photometer. The combined intake of iron from diet, groundwater with low levels of iron, and the simulated consumption of low-iron MNP in children was 5.8 ± 2.0 and 6.9 ± 2.5 mg/day, comprising 193% and 169% of the Estimated Average Requirements in the 2-3-year-old and 4-5-year-old subgroups, respectively. The combined intake of bioavailable iron from dietary and low-iron groundwater was 0.42 ± 0.023 and 0.22 ± 0.019 mg/day in children exposed to groundwater concentrations of 0.8-<2.0 mg/L and 0.0-<0.8 mg/L, respectively (p < 0.001). The mean concentration of hemoglobin in the respective groups was 12.17 ± 0.94 g/dL and 11.91 ± 0.91 g/dL (p = 0.30). The combined intake of iron from diet and the low-iron groundwater was associated with maintenance of hemoglobin concentration at the non-anemic level in > 90% of the children. The findings highlight the protective influence of the low concentration of iron in the drinking groundwater against childhood anemia in Bangladesh.