Iron doped lithium niobate (Fe:LiNbO3) in a simple focal plane geometry has demonstrated efficient optical limiting through two-beam coupling. The performance is largely independent of the total Fe concentration and the oxidation state of the Fe ions, providing the linear optical transmission of uncoated crystals is between 30% and 60%. Fe has been found to be the best dopant for LiNbO3, giving the widest spectral coverage and the greatest optical limiting. Optical limiting in Fe:LiNbO3 has been shown to be very much greater than predicted by simple diffusion theory. The reason for this is a higher optical gain than expected. It is suggested that this may be due to an enhancement of the space-charge field arising from the photovoltaic effect. The standard two-beam coupling equations have been modified to include the effects of the dark conductivity. This has produced a theoretical intensity dependence on the ΔOD which closely follows the behaviour observed in the laboratory. A further modification to the theory has also shown that the focusing lens f-number greatly affects the optical limiting characteristics of Fe:LiNbO3. A lens f-number of approximately 20 gives the best results.