The evolution of the magnetic moment in iron clusters containing 20-400 atoms is investigated using first-principles numerical calculations based on density-functional theory and real-space pseudopotentials. Three families of clusters are studied, characterized by the arrangement of atoms: icosahedral, body-centered cubic centered on an atom site, and body-centered cubic centered on the bridge between two neighboring atoms. We find an overall decrease of magnetic moment as the clusters grow in size towards the bulk limit. Clusters with faceted surfaces are predicted to have magnetic moment lower than other clusters with similar size. As a result, the magnetic moment is observed to decrease as function of size in a nonmonotonic manner, which explains measurements performed at low temperatures.