diff --git a/CHANGELOG.md b/CHANGELOG.md
index 193ca633f2fe6..af142fdba3414 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -22,6 +22,8 @@ The format is based on [Keep a Changelog](http://keepachangelog.com/en/1.0.0/).
 ### Fixed
 
 
+- Fixed DeepSpeed with IterableDatasets ([#7362](https://github.com/PyTorchLightning/pytorch-lightning/pull/7362))
+
 
 ## [1.3.0] - 2021-05-06
 
diff --git a/pytorch_lightning/plugins/training_type/deepspeed.py b/pytorch_lightning/plugins/training_type/deepspeed.py
index 54974739c1746..fe3f51fa99390 100644
--- a/pytorch_lightning/plugins/training_type/deepspeed.py
+++ b/pytorch_lightning/plugins/training_type/deepspeed.py
@@ -88,6 +88,7 @@ def __init__(
         allgather_bucket_size: int = 2e8,
         reduce_bucket_size: int = 2e8,
         zero_allow_untested_optimizer: bool = True,
+        logging_batch_size_per_gpu: Union[str, int] = "auto",
         config: Optional[Union[Path, str, dict]] = None,
         logging_level: int = logging.WARN,
         num_nodes: int = 1,
@@ -148,6 +149,13 @@ def __init__(
             zero_allow_untested_optimizer: Allow untested optimizers to be used with ZeRO. Currently only Adam is a
                 DeepSpeed supported optimizer when using ZeRO (default: True)
 
+            logging_batch_size_per_gpu: Config used in DeepSpeed to calculate verbose timing for logging
+                on a per sample per second basis (only displayed if logging=logging.INFO).
+                If set to "auto", the plugin tries to infer this from
+                the train DataLoader's BatchSampler, else defaults to 1.
+                To obtain accurate logs when using datasets that do not support batch samplers,
+                set this to the actual per gpu batch size (trainer.batch_size).
+
             config: Pass in a deepspeed formatted config dict,
                 or path to a deepspeed config: https://www.deepspeed.ai/docs/config-json.
                 All defaults will be ignored if a config is passed in. (Default: ``None``)
@@ -182,6 +190,7 @@ def __init__(
                 when using ZeRO Stage 3. This allows a single weight file to contain the entire model,
                 rather than individual sharded weight files.
                 Disable to save sharded states individually. (Default: True)
+
         """
         if not _DEEPSPEED_AVAILABLE:
             raise MisconfigurationException(
@@ -197,6 +206,7 @@ def __init__(
             self.config = self._create_default_config(
                 zero_optimization,
                 zero_allow_untested_optimizer,
+                logging_batch_size_per_gpu,
                 partition_activations=partition_activations,
                 cpu_checkpointing=cpu_checkpointing,
                 contiguous_memory_optimization=contiguous_memory_optimization,
@@ -409,14 +419,22 @@ def _format_batch_size_and_grad_accum_config(self):
                 " as this will be set via accumulate_grad_batches=x argument passed via the Lightning Trainer."
             )
         if "train_micro_batch_size_per_gpu" not in self.config:
-            # train_micro_batch_size_per_gpu is used for throughput logging purposes
-            # by default we use the batch size of the loader which may be incorrect if a batch sampler is passed
-            batch_size = self.lightning_module.train_dataloader().batch_sampler.batch_size
+            batch_size = self._auto_select_batch_size()
             self.config["train_micro_batch_size_per_gpu"] = batch_size
         self.config["gradient_accumulation_steps"] = self.lightning_module.trainer.accumulate_grad_batches
         if "gradient_clipping" not in self.config:
             self.config["gradient_clipping"] = self.lightning_module.trainer.gradient_clip_val
 
+    def _auto_select_batch_size(self):
+        # train_micro_batch_size_per_gpu is used for throughput logging purposes
+        # by default we try to use the batch size of the loader
+        batch_size = 1
+        if hasattr(self.lightning_module, 'train_dataloader'):
+            train_dataloader = self.lightning_module.train_dataloader()
+            if hasattr(train_dataloader, 'batch_sampler'):
+                batch_size = train_dataloader.batch_sampler.batch_size
+        return batch_size
+
     def _format_precision_config(self):
         amp_type = self.lightning_module.trainer.accelerator_connector.amp_type
         amp_level = self.lightning_module.trainer.accelerator_connector.amp_level
@@ -446,6 +464,7 @@ def _create_default_config(
         self,
         zero_optimization: bool,
         zero_allow_untested_optimizer: bool,
+        logging_batch_size_per_gpu: Union[str, int],
         partition_activations: bool,
         cpu_checkpointing: bool,
         contiguous_memory_optimization: bool,
@@ -466,6 +485,8 @@ def _create_default_config(
                 "zero_optimization": zero_kwargs,
                 **cfg
             }
+        if logging_batch_size_per_gpu != 'auto':
+            cfg = {"train_micro_batch_size_per_gpu": logging_batch_size_per_gpu, **cfg}
         return cfg
 
     def _filepath_to_dir(self, filepath: str) -> str:
diff --git a/tests/plugins/test_deepspeed_plugin.py b/tests/plugins/test_deepspeed_plugin.py
index c768a9aabf8fb..056c28ffa2309 100644
--- a/tests/plugins/test_deepspeed_plugin.py
+++ b/tests/plugins/test_deepspeed_plugin.py
@@ -7,6 +7,7 @@
 import torch.nn.functional as F
 from torch import nn, Tensor
 from torch.optim import Optimizer
+from torch.utils.data import DataLoader
 
 from pytorch_lightning import LightningModule, seed_everything, Trainer
 from pytorch_lightning.callbacks import Callback, ModelCheckpoint
@@ -14,7 +15,7 @@
 from pytorch_lightning.plugins import DeepSpeedPlugin, DeepSpeedPrecisionPlugin
 from pytorch_lightning.plugins.training_type.deepspeed import LightningDeepSpeedModule
 from pytorch_lightning.utilities.exceptions import MisconfigurationException
-from tests.helpers.boring_model import BoringModel
+from tests.helpers.boring_model import BoringModel, RandomDataset, RandomIterableDataset
 from tests.helpers.datamodules import ClassifDataModule
 from tests.helpers.runif import RunIf
 
@@ -234,6 +235,44 @@ def backward(self, loss: Tensor, optimizer: Optimizer, optimizer_idx: int, *args
         trainer.fit(model)
 
 
+@RunIf(min_gpus=1, deepspeed=True, special=True)
+@pytest.mark.parametrize(['dataset_cls', 'value'], [(RandomDataset, "auto"), (RandomDataset, 10),
+                                                    (RandomIterableDataset, "auto"), (RandomIterableDataset, 10)])
+def test_deepspeed_auto_batch_size_config_select(tmpdir, dataset_cls, value):
+    """Test to ensure that the batch size is correctly set as expected for deepspeed logging purposes."""
+
+    class TestModel(BoringModel):
+
+        def train_dataloader(self):
+            return DataLoader(dataset_cls(32, 64))
+
+    class AssertCallback(Callback):
+
+        def on_train_start(self, trainer, pl_module) -> None:
+            assert isinstance(trainer.accelerator.training_type_plugin, DeepSpeedPlugin)
+            config = trainer.accelerator.training_type_plugin.config
+
+            # int value overrides auto mode
+            expected_value = value if isinstance(value, int) else 1
+            if dataset_cls == RandomDataset:
+                expected_value = pl_module.train_dataloader().batch_size if value == "auto" else value
+
+            assert config['train_micro_batch_size_per_gpu'] == expected_value
+            raise SystemExit
+
+    ck = AssertCallback()
+    model = TestModel()
+    trainer = Trainer(
+        default_root_dir=tmpdir,
+        fast_dev_run=True,
+        callbacks=ck,
+        gpus=1,
+        plugins=DeepSpeedPlugin(logging_batch_size_per_gpu=value, zero_optimization=False),
+    )
+    with pytest.raises(SystemExit):
+        trainer.fit(model)
+
+
 @RunIf(min_gpus=1, deepspeed=True, special=True)
 def test_deepspeed_run_configure_optimizers(tmpdir):
     """