Anaemia in young sub-Saharan African children may be due to the double burden of malaria and iron deficiency. Primary analysis of a double-blind, cluster randomized trial of iron containing micronutrient powder supplementation in Ghanaian children aged 6 to 35 months found no difference in malaria risk between intervention and placebo groups. Here, we performed a secondary analysis of the trial data to assess the impact of long-term prophylactic iron fortificant on the risk of iron deficiency and anaemia in trial subjects. This population-based randomized-cluster trial involved 1958 children aged between 6 to 35 months, identified at home and able to eat semi-solid foods. The intervention group (n = 967) received a daily dose containing 12.5 mg elemental iron (as ferrous fumarate), vitamin A (400 μg), ascorbic acid (30 mg) and zinc (5 mg). The placebo group (n = 991) received a similar micronutrient powder but without iron. Micronutrient powder was provided daily to both groups for 5 months. At baseline and endline, health assessment questionnaires were administered and blood samples collected for analysis. The two groups had similar baseline anthropometry, anaemia, iron status, demographic characteristics, and dietary intakes (p > 0.05). Of the 1904 (97.2%) children who remained at the end of the intervention, the intervention group had significantly higher haemoglobin (p = 0.0001) and serum ferritin (p = 0.0002) levels than the placebo group. Soluble transferrin receptor levels were more saturated among children from the iron group compared to non-iron group (p = 0.012). Anaemia status in the iron group improved compared to the placebo group (p = 0.03). Continued long-term routine use of micronutrient powder containing prophylactic iron reduced anaemia, iron deficiency and iron deficiency anaemia among pre-school children living in rural Ghana's malaria endemic area.