A total number of fifteen Saidi lambs, about 9 months of age with average 36.66 kg live body weight were conducted to assess of supplemented dietary iodine on growth performance and activity of thyroid gland. Animals were classified into two groups similar in body weight. A control group (A), 8 animals, received no potassium iodide (KI) supplement while the second group (B), 7 animals, received 5.26 KI supplement /Kg diet. Body weight was recorded weekly while feed intake was recorded daily. Daily gain and feed conversion, Kg Starch value/kg body gain also was calculated. Serum blood samples were taken monthly for measuring of Tz and T4 hormones. Immediately after slaughtering, thyroid glands were taken for histological study. Results revealed that supplementation of dietary iodine resulted in a significant increase of roughage (P<0.05) concentrate and total feed intake (P<0.01). Dietary iodine significantly (P<0.01) improved live body weight and feed conversion. Respiration rate and both rectal and skin temperatures increased (P<0.01) due to KI supplemented. Dietary iodine resulted in significant (P<0.01) increase of thyroid gland weight, number of follicular cells and colloid volume per follicles while the number of follicles per field and average cell height decreased (P<0.01) significantly. Thyroid hormones (Tz and T4) were increased by about 7% in iodine treated lambs compared with control.