Natural enzymes are crucial in biological systems and widely used in biology and medicine, but their disadvantages, such as insufficient stability and high-cost, have limited their wide application. Since Fe3O4 nanoparticles were found to show peroxidase-like activity, researchers have designed and developed a growing number of nanozymes that mimic the activity of natural enzymes. Nanozymes can compensate for the defects of natural enzymes and show higher stability with lower cost. Iron, a nontoxic and low-cost transition metal, has been used to synthesize a variety of iron-based nanozymes with unique structural and physicochemical properties to obtain different enzymes mimicking catalytic properties. In this perspective, catalytic mechanisms, activity modulation, and their recent research progress in sensing, tumor therapy, and antibacterial and anti-inflammatory applications are systematically presented. The challenges and perspectives on the development of iron-based nanozymes are also analyzed and discussed.