Approximately 88% of adult male workers on a rubber plantation in West Java, Indonesia had hookworm infection, and over 45% were anemic as judged by a hemoglobin below 13 g/100 ml. Hemoglobin values and Harvard Step Test (HST) performance for both tappers and weeders were significantly correlated. The rubber tappers were paid by their work output, and their earnings correlated with hemoglobin levels. Morbidity and hemoglobin levels were also correlated. Caloric intakes were not correlated with either work output or HST performance. Treatment with 100 mg of elemental iron for 60 days resulted in a significant improvement in hematological status of the anemic individuals and in their HST performance, work output, and morbidity. Both treatment and placebo groups received a daily incentive payment of 15 rupiahs, equivalent to 5 to 7% of minimum daily wages. This sum, spent largely on food, resulted in added intakes of 3 to 5 mg of available iron and 50 mg of vitamin C. This is believed to explain a significant but lesser improvement in hemoglobin, HST performance, work output, and morbidity in the anemic placebo group. In an untreated subsample to whom no payment was given, no change in hemoglobin, hematocrit, work performance, HST score, or disease morbidity occurred. After income supplementation was stopped, hemoglobin and hematocrit levels and related changes reverted to initial levels within 30 days in the placebo groups, but were unchanged in the iron-treated groups. The cost of the iron supplementation was small compared with the economic benefits of increased productivity and lowered morbidity.