The potential use of iron-loaded alginate beads to fortify oil-in-water (O/W) emulsions was studied. Iron-loaded alginate beads with different sizes (0.65, 0.84, 1.5 and 2 mm) were produced by ionic gelation with calcium chloride, leading to 81% encapsulation efficiency (EE) of ferrous sulfate. These beads were added to O/W emulsions to investigate their effect on lipid oxidation. The use of iron-loaded alginate beads inhibited lipid oxidation in emulsions, compared to a control emulsion with the same concentration of free ferrous sulfate in the continuous phase, but did not totally prevent it. Results obtained with scanning electron microscopy and energy dispersive X-ray spectroscopy (EDX) analysis showed that some reactive iron was present at the surface of the beads. Oxidation of the lipid droplets was slightly higher for smaller alginate beads, suggesting that the reaction could be linked to the total bead surface. When covering iron-loaded beads with an extra layer of alginate, lipid oxidation was inhibited, which confirmed the role of reactive surface-bound iron. This study shows that the location of iron within the encapsulates plays a crucial role in the chemical stability of fortified foods and should be taken as a starting point in the design of iron-fortified food products.