Reactive oxygen species (ROS) initiate onset of the mitochondrial permeability transition (MPT) and play a key role in IR injury. Iron is a critical catalyst for ROS generation. Accordingly, our aim was to investigate the role of chelatable iron in ROS‐dependent MPT formation and cell death during IR to rat hepatocytes. Cells were incubated anoxically at pH 6.2 for 4 h and re‐oxygenated at pH 7.4 to simulate IR. Chelatable iron, ROS, mitochondrial membrane potential and cell death were monitored by confocal imaging of calcein, chloromethyl dichlorofluorescein, tetramethylrhodamine methyl ester and propidium iodide, respectively. Ischemia caused progressive quenching of cytosolic calcein, indicating an increase of chelatable Fe2+, which was suppressed by desferal and starch‐desferal pretreatment. Quenching of calcein was also blocked by ebselen and ferristatin, inhibitors of lysosomal divalent metal transporter‐1. Ischemia induced quenching of calcein loaded into mitochondria, which was blocked by desferal, starch‐desferal and Ru360. These agents also decreased mitochondrial ROS formation, MPT onset and cell killing after reperfusion. In conclusion, lysosomal iron is mobilized into mitochondria during ischemia. Increased mitochondrial iron then predisposes cells for ROS‐mediated MPT opening and cell killing after reperfusion. (Supported by NIH grants DK073336 and DK37034)