Iron (Fe) is a common trace element in drinking water. However, little is known about how environmental concentrations of Fe affect the metabolism and toxicity of arsenic (As) in drinking water. In this study, influence of Fe at drinking water-related concentrations (0.1, 0.3, and 3 mg Fe (total)/L) on As metabolism and toxicity, and the roles of gut microbiota during this process were investigated by using in vitro Simulator of the Human Intestinal Microbial Ecosystem (SHIME). Results showed that Fe had ability to decrease bioaccessible As by coflocculation in small intestine. 0.1 and 0.3 mg/L Fe significantly increased As methylation in simulated transverse and descending colon. Gut microbiota played an important role in alteration of As species, and Fe could affect As metabolism by changing the gut microbiota. Bacteroides, Clostridium, Alistipes, and Bilophila had As resistance and potential ability to methylate As. Cytotoxicity assays of effluents from simulated colons showed that the low levels of Fe decreased As toxicity on human hepatoma cell line HepG2, which might be due to the increase of methylated As. When assessing the health risk of As in drinking water, the residual Fe should be considered.