Understanding the mechanism of iron‐catalyzed graphitization of biomass is an important step for the large‐scale synthesis of green graphene. Although iron is known to be the most active transition metal for the catalytic graphitization of cellulose‐derived biochar, the direct effect of the iron molecular structure on the formation of highly graphitic carbon remains elusive. Here, biochar was produced from pyrolysis of iron‐impregnated cellulose at three different temperatures (1000, 1400, and 1800 °C). X‐ray diffraction, X‐ray photoelectron spectroscopy, and magnetic measurements were used to probe changes in biochar nanostructure catalyzed by the inclusion of iron. An increase of pyrolysis temperature led to an increase in the iron particle size and the degree of iron reduction, as well as the formation of larger graphitic carbon crystallite sizes, and these two attributes of iron were seen to positively affect the biochar graphitization usually challenging under 2000 °C.