We have performed direct SQUID measurements of the average magnetization M̄ of a series of ultrathin (18–130 Å) Fe single crystal films grown by molecular beam epitaxy (MBE) on GaAs substrates and overcoated with Al. These measurements were motivated by earlier FMR measurements [G. A. Prinz, G. T. Rado, and J. J. Krebs, J. Appl. Phys. 53, 2087 (1982); J. J. Krebs, F. J. Rachford, P. Lubitz, and G. A. Prinz., J. Appl. Phys. 53, 8058 (1982)] on the identical films which showed a monotonic increase in average resonance field with decreasing thickness. In-plane M̄ data were taken over the ranges 0.5≤H≤30 kOe and 5≤T≤295 K and corrected for the (significant) substrate diamagnetism. The data clearly indicate that M̄ is diminished for the thinnest films and, for a film of thickness L, the behavior of M̄ is given by M̄=M0[(η+1/2(1−η)L/L0)] to a good approximation, where M0 is the bulk magnetization of Fe, L0 is a characteristic decay depth, and ηM0 is the magnetization at the interface where the Fe film is compressed by 1.4% due to lattice mismatch. At 295 K we find η=0.49 and L0=91 Å with only modest changes at 5 K. The absolute M̄ values are known to ±10% due largely to the uncertainty in L as determined by x-ray fluorescence and Dektak measurements. We conclude that this effect is not due to a nonuniform film thickness (voids or islands) nor to interdiffusion at the interface. Rather it is thought to be due to the depth dependent lattice compression arising from mismatch although the mechanism is not yet clear.