Abstract Brain iron is important for normal function, and aberrantly high iron is often associated with neuroinflammation and neurodegeneration. Oligodendrocytes are a major source of iron in brain as are iron-laden activated macrophages and microglia. T2*-weighted MRI detected a large decrease in signal at the olfactory nerve layer (ONL) in normal young mice over the period of 3 to 12 weeks of age, consistent with iron accumulation in this region. This signal change was most prominent in the inner nerve fiber layer (iNFL). Iron histochemistry, ferritin immunohistology, and electron microscopy showed that there was high iron and ferritin in the olfactory ensheathing cells (OECs) in the iNFL of ONL. The iron concentration in the iNFL was calculated to be approximately 2–3 mM based on MRI T2* relaxivity. The glomerular region near the high-iron iNFL had evidence of neuroinflammation markers of activated microglia and lipofuscin. Lipofuscin was found within the activated microglia as early as 6 weeks. In rats, MRI T2* signal loss in the ONL and high iron levels and lipofuscin were only detected in older rats (11 months) but not in young rats. These results indicate that mouse OECs develop high levels of iron at an early age. It is not clear if this iron is important for mouse OEC function or a result of phagocytic activity of OECs. The relation between iron and inflammation may be interesting to study in these young, healthy mice.