Context: Children living in the mountains are at risk of iodine deficiency disorder (IDD). IDD causes hypothyroidism which can lead to impaired neurologic integrity development and axial tonus deficit. Stimulus such as massage and gymnastics will increase somatic and autonomic nerve activity that is thought to be very useful for improving psychomotor development. Objective: The purpose of this study was to assess the effect of massage and exercise on serum BDNF levels and psychomotor development of children under two years of age in IDD endemic area. Method: This research type was quasi-experimental with non-randomized one group pretest-posttest design. Research subjects were 40 children under two years old from one of IDD endemic areas in Samigaluh Sub-district, Kulon Progo Regency. Massage and gymnastics were performed by mothers who had been trained before by a physiotherapist. Massage and gymnastics were performed every morning or evening in 10-15 minutes, 1-5 times per week for 2 months. Serum BDNF levels measured by ELISA method and psychomotor development measured by Denver DDST II were performed before and after treatment. Data were analyzed by using T test and Kruskal Wallis test. Results: Massage and gymnastics lowered serum TSH levels (p=0.291), increased serum BDNF levels from 8102.80 ± 14471.52 pg/ml to 17153.76 ± 5973.39 pg/ml, (p=0.006), and improved psychomotor development of fine adaptive and motor aspects (p=0.035), gross motor (p=0.015), personal social (p=0.17) and language (p=0.939). Conclusion: Massage and gymnastics 1-5 times per week for 2 months in children under 2 years old in IDD endemic areas improves thyroxine function, improves neurological and psychomotor development especially in fine motor and gross motor aspects.