Hydroxyapatite (Ca10(PO4)6(OH)2, HAp) doped with various transition metals has generated great interest in view of its potential application in a wide variety of fields, including in catalysis as a support with a series of attractive properties. Despite a large number of experimental works devoted to the synthesis and application of iron-substituted hydroxyapatites, problems concerning the location, introduced defects, and charge compensation schemes for Fe2+ and/or Fe3+ cations in the crystal structure of HAp remain unclear. This paper is devoted to the comprehensive analysis of iron (II) and (III) introduction into the HAp lattice by density functional theory (DFT) calculations. We show that the inclusion of Fe2+ in the Ca(1) and Ca(2) positions of HAp is energetically comparable. For the Fe3+, there is a clear preference to be included in the Ca(2) position. The inclusion of iron results in cell contraction, which is more pronounced in the case of Fe3+. In addition, Fe3+ may form a shorter linkage to oxygen atoms. The incorporation of both Fe2+ and Fe3+ leads to notable local reorganization in the HAp cell.