Iron deficiency anaemia (IDA) is common in Indian patients with rheumatoid arthritis (RA). We evaluated red blood cell indices, serum iron related and bone marrow iron stores measurements in diagnosing iron deficiency in patients with RA. Fifty consecutive anaemic patients with RA had their complete blood counts, red cell indices, serum iron, serum ferritin and serum total iron binding capacity (TIBC) measured and underwent posterior iliac crest bone marrow aspiration. Fixed smears were stained for iron with Perl's Prussian blue and patients who had no (grade 0) or minimal stainable iron (grade I) were regarded as iron deficient and rest iron replete (grade II-IV) and hence as having anaemia of chronic disease (ACD). To determine diagnostic power of tests used for diagnosing iron deficiency in addition to positive likelihood ratio, sensitivity, specificity and negative predictive values; receiver operating characteristics (ROC) curves were plotted and areas under the receiver-operating curves were compared. Eighteen patients (36%) had IDA and 32 (64%) had ACD. Correlation between the bone marrow iron stores and serum ferritin was poor in the IDA group (r = -0.09, P = 0.57) and significant in the ACD group (r = 0.79, P < 0.0001). Areas under the ROC curves for mean corpuscular haemoglobin (MCV), serum iron, TIBC and mean corpuscular haemoglobin concentration (MCHC) were relatively low (0.52, 0.71, 0.75 and 0.77, respectively) and these tests had low positive likelihood ratios (1.08, 2.13, 4.62 and 1.5, respectively). Both area under ROC curve [0.98, 95% confidence interval (0.94, 0.99)] and negative predictive value (97%) were highest when cut off serum ferritin was <82 microg/l. In patients with RA serum iron, TIBC, MCV and MCHC have limited value in diagnosing iron deficiency. In this study compared to American and European studies a much higher cut off value of serum ferritin had most diagnostic power for detecting iron deficiency. Bone marrow iron stores measurements appears to be the most reliable method for diagnosing IDA however, it needs to be taken in conjunction with other laboratory findings and the clinical scenario.