An oxygen-deficient (12.8 microM dissolved oxygen and oxygen saturation 5.0-7.4% in the water of the deep hole) isolated water system in the deep hole of the Yarra River estuary was investigated to discover the relationship between iodate and iodide. The iodate concentration in the water of the deep hole was very low (0.039 to 0.062 microM at bottom water, salinity from 26.8-30.0 Practical Salinity Scale, 1978), because iodate reduced to iodide in the water by reducing agents (S2-, Fe2+ and Mn2+) diffused from the sediment of the deep hole. / The concentrations of iodine species in the sediment pore water and suspended material in the water of the deep hole were determined to investigate iodine cycling in the deep hole. The iodine flux from sediment into overlying water in the deep hole was 15.6 micromol/m^2.day. The concentration of total inorganic iodine (iodate+iodide) in the dry suspended material from the water of the deep hole was 0.117 micro mol/g. The water residence time in the deep hole was studied. In winter especially, the seawater of high density may intrude into the deep hole with the highest tides. The seawater remains trapped in the deep hole below the halocline, which allows the development of oxygen-deficient conditions. / It was found that in the deep hole the iodide concentration increase resulted from sediment diffusion (36%), iodate reduction (27%) and release from suspended material (37%) during the water residence time in the water of the deep hole. The iodine cycling in the deep hole was: iodate in the water reduced to iodide by reducing agents diffused from sediment; suspended material containing soluble or particular iodine may release iodide and also trap iodate and iodide from water during precipitation; iodate in the sediment reduced to iodide and iodide diffused from sediment into overlying water. Iodine is accumulated in the isolated water in the deep hole and might be moved out at the next water exchange.