The reduction of tellurite (Te(IV)) by dissimilatory metal reducing bacterium, Shewanella oneidensis MR-1, was promoted in the presence of Fe(III) in comparison with Te(IV) bioreduction in the absence of Fe(III). Electron microscopic analyses revealed that iron promoted Te(IV) reduction led to form exclusively extracellular crystalline Te(0) nanorods, as compared to the mostly intracellular formation of Te(0) nanorods in the absence of Fe(III). The Te K-edge X-ray absorption spectrometric analyses demonstrated that S. oneidensis MR-1 in the presence of Fe(III) reduced Te(IV) to less harmful metallic Te(0) nanorods through the precipitation of tellurite (Te(IV)Ox) complex by the bacterial respiration of Fe(III) to Fe(II) under anaerobic conditions. However, Fe(II) ion itself was only able to precipitate the solid tellurite (Te(IV)Ox) complex from the Te(IV) solution, which was not further reduced to Te(0). The results clearly indicated that bacterial S. oneidensis MR-1 plays important roles in the reduction and crystallization of Te(0) nanorods by as yet undetermined biochemical mechanisms. As compared to the slow bacterial Te(IV) reduction in the absence of Fe(III), the rapid reduction of Te(IV) to Te(0) by the concerted biogeochemical reaction between Fe(II) and S. oneidensis MR-1 could be applied for the sequestration and detoxification of Te(IV) in the environments as well as for the preparation of extracellular Te(0) nanorod structures.