The synthesis of zero‐valent iron (Fe(0)) nanoparticles in pyridine using lithium bipyridinyl ([LiBipy]) or lithium pyridinyl ([LiPy]) is presented. FeCl3 is used as the most simple starting material and reduced either in a [LiBipy]‐driven two‐step approach or in a [LiPy]‐driven one‐pot synthesis. High‐quality nanoparticles are obtained with uniform, spherical shape, and mean diameters of 2.9 ± 0.5 nm ([LiBipy]) or 4.1 ± 0.7 nm ([LiPy]). The as‐prepared, high purity Fe(0) nanoparticles are monocrystalline. In addition to particle characterization (high‐resolution transmission electron microscopy, scanning transmission electron microscopy, dynamic light scattering), composition and purity are examined in detail based on electron diffraction, X‐ray powder diffraction, elemental analysis, infrared spectroscopy, 57Fe Mössbauer spectroscopy, and magnetic measurements. Due to their small size and high purity, the Fe(0) nanoparticles are highly reactive. They can be used in follow‐up reactions to obtain a variety of iron compounds, which is exemplarily shown for the transformation to iron carbide (Fe3C) nanoparticles, the reaction with sulfur to obtain FeS nanoparticles, or the direct reaction with pentamethylcyclopentadiene to FeCp*2 (Cp*: pentamethylcyclopentadienyl).