The red cell distribution width (RDW), and another red cell discriminant function incorporating RDW (MCV2 x RDW/Hgb x 100) were determined in a group of 30 patients with iron deficiency anemia, 30 patients with beta thalassemia trait, and 30 normal subjects. Both RDW and (MCV2 x RDW/Hgb x 100) mean values were significantly higher in iron deficiency anemia than in beta thalassemia trait (p < 0.001). Taking RDW equal or above 21.0 percent among microcytic anemia patients, we identified correctly 90.0 percent of patients with iron deficiency anemia. The sensitivity and specificity of the test were 90.0 percent (IC 95 percent: 0.75-0.98) and 77.0 percent (IC 95 percent: 0.60-0.88), respectively. RDW values below 21.0 percent identified correctly 77.0 percent of beta thalassemia trait with a sensitivity and a specificity of 77.0 percent (IC 95 percent: 0.60-0.88) and 90.0 percent (IC 95 percent: 0.75-0.96), respectively. Taking values of (MCV2 x RDW/Hgb x 100) above and below 80.0 percent as indicative of iron deficiency and beta thalassemia trait, respectively, we identified correctly 97.0 percent of those patients in each group. Both sensitivity and specificity were 97.0 percent (IC 95 percent: 0.84-0.99). These results indicated that the red cell discriminant function incorporating volume dispersion (MCV2 x RDW/Hgb x 100) is a highly sensitive and specific method in the initial screening of patients with microcytic anemia and is better than RDW in differentiating iron deficiency anemia from beta thalassemia trait.