Nanoscale zerovalent iron (nZVI) has proven to be a promising solution for contaminant remediation, but its application is limited due to its high cost of synthesis and instability. Encapsulating the nZVI in carbon spheres generates more stable particles with improved properties due to the adsorption capacity provided by the carbon. The aim of this work was to synthesize thin shell carbon-encapsulated iron nanoparticles (CE-nFe) through hydrothermal carbonization (HTC) using olive mill wastewater as a carbonaceous source, which is a cheaper and more sustainable method of synthesis than the current practice. With this method, a high quality nanomaterial was obtained, which displayed surface areas up to 220 m 2 /g and was composed of ∼4 nm iron nanoparticles spheres surrounded by a thin layer of carbon (<1 nm). The effect of HTC conditions on the nanoparticle structure and morphology was evaluated. Post-treatment of the samples under nitrogen flow at high temperatures (600−800 °C) was used to increase the ZVI content of the samples. Finally, the synthesized CE-nFe were tested for the removal of heavy metals from water. Thanks to the carbon layer, CE-nFe proved to avoid the delivery of heavy metal ions back to water, a behavior previously observed with nZVI due to its aging after long time periods.