Background Iron and zinc are essential micronutrients during school-age period. Milk could be an alternative medium for mineral fortification because it is consumed frequently by children. Objective To evaluate the effect of iron-zinc fortified milk supplementation on iron status and functional outcomes in underweight children. Methods 44 2 underweight subjects aged 7-10 years attending 10 primary schools in Jakarta and Solo were recruited in the study. Subjects who had chronic illnesses, severe anemia, thalassemia or cow's milk allergy were excluded. Blood samples were analyzed to determine hemoglobin, serum ferritin and serum zinc. Serum CRP was measured in sub sampled subjects (n= 60). Subjects were randomizedly allocated to receive iron-zinc fortified milk (n = 225) and standard milk (n = 217) for six months. The fortified milk will provide additional6.3 mg iron and 1.5 mg zinc per day (2 feeds). The main outcomes measured were iron status, cognitive function, growth, physical fitness and morbidity. Results Study groups were comparable at baseline. The fortified milk group had better physical fitness score and exercise duration at baseline. Both milk supplementations reduced the prevalence of anemia and iron deficiency. Fortified milk improved the speed processing score (P< 0.0001), height (P<0.0001) and sitting height (P=O.Ol) significantly. Conclusion Supplementation of milk reduces the prevalence of anemia and iron deficiency. Zinc-iron fortified milk gives positive impact on cognitive performance, growth, and physical fitness.