Fluorescence sensing and imaging techniques are being widely studied for detecting carbon monoxide (CO) in living organisms due to their speed, sensitivity, and ease of use to biological systems. Most fluorescent probes used for this purpose are based on heavy metal ions like Pd, with a few using elements like Ru, Rh, Ir, Os, Tb, and Eu. However, these metals can be expensive and toxic to cells. There is a need for more affordable and biologically safe fluorescent probes for CO detection. Drawing inspiration from the robust affinity exhibited by heme iron toward CO, in this work, a rhodamine derivative called RBF was developed for imaging CO in living cells by binding to Fe(III) and could be used for CO sensing. A Fe(III)-based fluorescent probe for CO imaging in living cells offers advantages of cost effectiveness, low toxicity, and ease of use. The fluorescence detection using the RBF-Fe system showed a direct correlation with increasing levels of CORM-3 (LOD = 146 nM) or the exposure time of CO gas, displaying reduced fluorescence. A CO test paper based on RBF-Fe was created for simple on-site CO detection, where fluorescence would diminish in response to CO exposure, allowing rapid (2 min) visual identification. Imaging of CO in living cells was successfully conducted using the probe system, showing a decrease in fluorescence intensity as CORM-3 concentrations increased, indicating its effectiveness in monitoring CO levels accurately within living cells.