Objective Over 300 million people rely on desalinated seawater and the numbers are growing. Desalination removes iodine from water and could increase the risk of iodine-deficiency disorders (IDD). The present study assessed the relationship between iodine intake and thyroid function in an area reliant on desalination. Design A case–control study was performed between March 2012 and March 2014. Thyroid function was rigorously assessed by clinical examination, ultrasound and blood tests, including serum thyroglobulin (Tg) and autoimmune antibodies. Iodine intake and the contribution made by unfiltered tap water were estimated by FFQ. The contribution of drinking-water to iodine intake was modelled using three iodine concentrations: likely, worst-case and best-case scenario. Setting The setting for the study was a hospital located on the southern Israeli Mediterranean coast. Subjects Adult volunteers (n 102), 21–80 years old, prospectively recruited. Results After screening, seventy-four participants met the inclusion criteria. Thirty-seven were euthyroid controls. Among those with thyroid dysfunction, twenty-nine were classified with non-autoimmune thyroid disease (NATD) after excluding eight cases with autoimmunity. Seventy per cent of all participants had iodine intake below the Estimated Average Requirement (EAR) of 95 µg/d. Participants with NATD were significantly more likely to have probable IDD with intake below the EAR (OR=5·2; 95 % CI 1·8, 15·2) and abnormal serum Tg>40 ng/ml (OR=5·8; 95 % CI 1·6, 20·8). Conclusions Evidence of prevalent probable IDD in a population reliant on desalinated seawater supports the urgent need to probe the impact of desalinated water on thyroid health in Israel and elsewhere.