The research showed lower intelligence quotients and reading scores in primary school students whose mothers had had too little iodine while pregnant.
Experts advise women of child-bearing age to maintain iodine in their diets by eating dairy products and fish, 'BBC News' reported.
Researchers say iodine is essential for the development of the brain as it is needed to build some of the body's hormones. A severe deficiency is the leading cause of preventable brain damage in the world.
Researchers at Surrey and Bristol Universities looked at iodine levels in urine samples taken from pregnant women in south-west England.
Also Read
Iodine deficiency was common - affecting two-thirds of women, according to the study published in the journal Lancet.
Their kids went on to have slightly lower IQs at the age of eight and worse reading ability aged nine.
"We saw a three-point IQ difference between children who were born to mothers with low iodine in early pregnancy and children who were born to mothers above the cut-off," Dr Sarah Bath said.
"Our advice is to make sure they have enough iodine intake, and take additional iodine in safely, probably from food - dairy products, fish," Prof Margaret Rayman said.