This study describes an iron-catalyzed divergent oxidation of styrene into β-hydroxylmethylketone and ketone under photo-irradiation. This divergence is ascribed to the use of styrene with various substituents. More importantly, methanol is oxidized into formaldehyde in the reaction and serves as a C1 synthon. Mechanism investigations show that the reaction is initiated by oxidative SET to transfer styrene into the cation radical. The reaction pathway undergoes HAT and β-hydride elimination as well as a concerted cyclization. Particularly, several drug-like molecules, such as melperone analogue, lenperone analogue, and haloperidol analogue, are synthesized. In addition, this method is also applicable to the synthesis of natural product (R)-atomoxetine.