Iron (Fe) plays a fundamental role in coral symbiosis, supporting photosynthesis, respiration, and many important enzymatic reactions. However, the extent to which corals are limited by Fe and their metabolic responses to inorganic Fe enrichment remains to be understood. We used respirometry, variable chlorophyll fluorescence, and O2 microsensors to investigate the impact of increasing Fe(III) concentrations (20, 50, and 100 nM) on the photosynthetic capacity of two Mediterranean coral species, Cladocora caespitosa and Oculina patagonica. While the bioavailability of inorganic Fe can rapidly decrease, we nevertheless observed significant physiological effects at all Fe concentrations. In C. caespitosa, exposure to 50 nM Fe(III) increased rates of respiration and photosynthesis, while the relative electron transport rate (rETR(II)) decreased at higher Fe(III) exposure (100 nM). In contrast, O. patagonica reduced respiration, photosynthesis rates, and maximum PSII quantum yield (Fv/Fm) across all iron enrichments. Both corals exhibited increased hypoxia (<50 µmol O2 L−1) within their gastric cavity at night when exposed to 50 and 100 nM Fe(III), leading to increased polyp contraction time and reduced O2 exchange with the surrounding water. Our results indicate that C. caespitosa, but not O. patagonica, might be limited in Fe for achieving maximal photosynthetic efficiency. Understanding the multifaceted role of iron in corals’ health and their response to environmental change is crucial for effective coral conservation.