Background <p>Iron supplementation can negatively affect gut health, while probiotics may improve intestinal iron absorption and gut health. Therefore, combined supplementation of iron and probiotics could be beneficial.</p> Methods <p>A placebo-controlled randomised controlled trial was conducted among 248 anaemic (Hb 7–10.9 g/dL) children under 5 years of age. Participants were randomly assigned to receive intervention either with Iron-Folic acid (IFA) syrup (3 mg elemental iron/kg body weight/day) along with probiotic (Lactobacillus plantarum UBLP40, 10¹⁰CFU) or control (IFA along with placebo) for 90 days. Compliance and morbidity were assessed, and haemoglobin, iron status, inflammatory and gut-health markers were assessed at baseline and endline. The primary per-protocol analysis included participants with haemoglobin assessments available at both time points.</p> Results <p>At the end of the intervention, mean haemoglobin significantly increased from baseline in both groups (intervention: <i>n</i> = 79, 1.96 ± 1.35 g/dL vs. control: <i>n</i> = 86, 1.91 ± 1.36 g/dL, <i>p</i> &lt; 0.001, paired t-test for within-group comparisons). The prevalence of anaemia reduced by (77.4% vs. 79.8%), iron deficiency (98.0% vs. 94.8%) and iron deficiency anaemia (100%) in intervention and control groups, respectively. No significant between-group differences were observed in haemoglobin, anaemia prevalence, iron status, morbidity, or gut health. In multiple regression analysis, rise in haemoglobin was associated with baseline haemoglobin, but not with probiotic use.</p> Conclusions <p>Probiotic supplementation alongside IFA provided no additional benefits on iron status, adverse effects or gut health markers among anaemic Indian children. The absence of a placebo-only group, due to ethical considerations, limited the ability to isolate the net effect of the intervention.</p>