Knowledge of physicians has an important role in optimal use of blood products. This study was carried out to assess Iranian physicians' knowledge in transfusion medicine. In this cross-sectional study, 1242 physicians were selected through multistage sampling method in March 2007. Physicians' knowledge was assessed by the questionnaire comprising of 50 questions addressing basic knowledge, clinical aspects of blood use and transfusion reactions. One point was awarded for each correct answer. Approximately 22%, 37%, and 40% of the questions referring to basic knowledge, clinical aspects of blood use and transfusion reactions, respectively, were replied correctly. Thirty three percent came out to be the average figure for the questions receiving correct answers. Knowledge score of the specialists who were more frequently involved in blood use was not significantly different from other specialists (radiologists or psychiatrics) and general practitioners. Knowledge score decreased with increasing years in practice (P < 0.001). Ninety nine percent of physicians under the study believed that they required special education to raise their transfusion medicine knowledge. Knowledge of physicians was about one-third lower than the expected level. Therefore, educational materials concerning transfusion medicine should be provided for medical students, residents and fellows. For practicing physicians, continuous medical education programmes should be offered so that the level of transfusion medicine knowledge can be improved.