Carbon monoxide is a key C1 feedstock for the industrial production of hydrocarbons, where it is used to make millions of tonnes of chemicals, fuels, and solvents per annum. Many transition metal complexes can coordinate CO, but the formation of new C-C bonds in well-defined compounds from the scission and subsequent coupling of two or more CO moieties at a transition metal centre remains a challenge. Herein, we report the use of low-coordinate iron(II) complexes for the selective scission and homologation of CO affording unusual squaraines and iron carboxylates at ambient temperature and pressure. A modification of the ligand framework allows for the isolation and structural characterisation of a proposed metallacyclic Fe(II) carbene intermediate. These results indicate that, with the appropriate choice of supporting ligands, it is possible to cleave and homologate carbon monoxide under mild conditions using an abundant and environmentally benign low-coordinate, first row transition metal.