Aim The World Health Organization (WHO) published universal growth standards for children below five year of age in 2006. Traditionally, Swedish growth references have been used to monitor growth of children in Iceland, but it is not yet known how they compare with these reference charts. Methods A total of 2128 longitudinal measurements of length or height, 2132 of weight and 2126 of head circumference between birth and four years of age were collected in 1996‐2000 from 199 healthy children (53% boys) recruited at Landspitali University Hospital. Measurements were converted to z‐scores using the WHO growth standards and Swedish growth references for further analysis with mixed‐effects models. Results Length or height, weight and in particular head circumference largely exceeded the WHO standards, with average z‐scores that fluctuated between 0.5 and 1.5. Likewise, the proportion of children with a z‐score larger than 2 SD increased about 10‐fold. Icelandic children were longer and heavier than their Swedish peers during the first six months of life, but differences were less pronounced thereafter. Conclusion The growth of Icelandic children deviated significantly from the WHO growth standards. Although more comparable to the Swedish references, significant differences were found, suggesting that a national growth reference would be more appropriate.