In this study, molecular dynamics (MD) simulations were employed to compare the effects of different solidification conditions on the solidification behaviour, stress distribution, and degree of crystallization of iron. The results indicate significant differences in nucleation and microstructural evolution between the two solidification methods. In the homogeneous temperature field, the solidification of iron is characterized by instantaneous nucleation. The BCC phase surged at 1431 K followed by the phenomenon of latent heat of crystallization. As the temperature continued to decrease, the percentage of the BCC phase continued to increase steadily. Eventually, the atoms aggregated to form a crystal nucleus and grow outward to form polycrystalline structures. During gradient solidification, continuous nucleation of iron leads to a slow increase in the BCC phase. From the initial stage of solidification, the solid–liquid interface moves in the direction of higher temperature and is accompanied by a higher stress distribution. Furthermore, increasing the temperature gradient, particularly the cooling rate, accelerates the transformation efficiency of iron in the gradient solidification process. In addition, increasing the cooling rate or temperature gradient reduces the residual stress and crystallinity of the solidified microstructure. It is worth noting that an increased temperature gradient or cooling rate will produce higher residual stress and uneven microstructure in the boundary region. This study provides an atomic-level understanding of the improvement in the solidification performance of iron.