Magnetic properties of small iron clusters in a molecular beam are investigated by examining their deflections in a Stern-Gerlach magnet. The magnetization is probed as function of magnetic field, temperature and cluster size. The clusters are either heated with light from a pulsed laser which affects the vibrational temperature, or cooled in supersonic expansions which primarily affect the rotational temperature. We find that at temperatures up to 1500 K the magnetic moments of laser heated Fe 120–140 clusters are much larger than predicted either in the Heisenberg model or compared with the bulk values suggesting a stronger exchange interaction. Furthermore, rotationally cold clusters show anomalously magnetization which is non-linear with the applied field. This effect is found to be related to the anisotropy coupling of the total spin with the cluster framework. A model taking this effect into account and assuming a resonant coupling between the rotations and the Larmor precession of the spins gives good qualitative agreement with the observations.