Iapetus is a medium sized icy satellite of Saturn. It has two spectacular features: the equatorial ridge (ER) and the abnormally large flattening. The flattening is usually explained in terms of large non-hydrostatic fossil equatorial bulge (EB) supported by a thick lithosphere. Here we show, building on the principle of isostasy, that EB and ER could be a result of low density roots underlying the lithosphere below the equator. The low density matter formed the layer over the core of the satellite. Such situation was unstable. The instability led to origin of axially symmetric plumes that formed equatorial bulge and equatorial ridge. So, we explain both: EB and ER in the frame of one hypothesis.