Introduction: Thalassemia and iron deficiency may both result in hypochromic microcytic anemia. Hematological algorithms that differentiate the two are mainly established in adult selected diagnostic groups. We aimed at creating an algorithm applicable in the presence of children, hemoglobin variants, and iron deficiency. Methods: Our study material constituted blood samples referred during 1 year for routine diagnostics of hemoglobinopathy. We included 443 samples, of which 37% were from children 3 months or older. We found beta-thalassemia trait (n = 100), alpha-thalassemia (n = 75), combined alpha-/beta-thalassemia (n = 14), hemoglobin variants (n = 42), and no-hemoglobinopathy (n = 207), of whom 107 had a ferritin at or below 20 mu g/L. We included reticulocyte hemoglobin equivalent, ferritin, and erythrocyte count in our algorithm. Results: Our algorithm differentiated beta-thalassemia trait from no-hemoglobinopathy with a sensitivity of 99% at 83% specificity. It performed better than other published algorithms when applied to all patient samples, while equally or moderately better in the 63% adult samples. Our algorithm also detected the clinically significant alpha-thalassemias, and most of the combined alpha-/beta-thalassemias and thalassemic hemoglobin variants. Conclusion: Our algorithm efficiently differentiated thalassemia and thalassemic hemoglobin variants from iron deficiency in children and adults.