Iron (Fe) reduction is one of Earth's most ancient microbial metabolisms, but after atmosphere-ocean oxygenation, this anaerobic process was relegated to niche anoxic environments below the water and soil surface. However, new technologies to monitor redox processes at micrometer scales relevant to microbial cells have the potential to reveal how oxygen (O2) concentrations control the distribution of aerobic and anaerobic metabolisms. To explore the impact of varying O2 levels on microbial Fe reduction, we cultivated a facultative Fe-reducing bacterium in a novel microfluidic reactor integrated with transparent planar O2 sensors. Contrary to expectations, microbial growth induced Fe(III)-oxide (ferrihydrite) reduction under fully oxygenated conditions, without the formation of O2-depleted micro-sites. Our observations fundamentally change our understanding of Fe cycling in ancient and contemporary environments, from our interpretation of Fe mineralogy in the rock record to heavy metal and nutrient mobility in the modern subsurface.