The role of adenosine deaminase acting on RNA1 (ADAR1) in colorectal cancer (CRC) is poorly understood. This study investigated the roles and underlying molecular mechanisms of ADAR1 and its isoforms, explored the correlations between ADAR1 expression and the immune microenvironment and anticancer drug sensitivity, and examined the potential synergy of using ADAR1 expression and clinical parameters to determine the prognosis of CRC patients. CRC samples showed significant upregulation of ADAR1, and high ADAR1 expression was correlated with poor prognosis. Silencing ADAR1 inhibited the proliferation, invasion, and migration of CRC cells and induced ferroptosis by suppressing FAK/AKT activation, and the results of rescue assays were consistent with these mechanisms. Both ADAR1‐p110 and ADAR1‐p150 were demonstrated to regulate the FAK/AKT pathway, with ADAR1‐p110 playing a particularly substantial role. In evaluating the prognosis of CRC patients, combining ADAR1 expression with clinical parameters produced a substantial synergistic effect. The in vivo tumorigenesis of CRC was significantly inhibited by silencing ADAR1. Furthermore, ADAR1 expression was positively correlated with tumor mutational burden (TMB) and microsatellite status (p < 0.05), indicating that ADAR1 plays a complex role in CRC immunotherapy. In conclusion, ADAR1 plays oncogenic roles in CRC both in vitro and in vivo, potentially by inhibiting ferroptosis via downregulation of the FAK/AKT pathway. Thus, ADAR1 serves as a potential prognostic biomarker and a promising target for CRC therapy.