In the present work, iron whitlockite (Fe-WH, Ca18Fe2(HPO4)2(PO4)12) powder was successfully synthesized by a wet-chemical approach. The synthesis was performed through a dissolution-precipitation process under hydrothermal conditions. The final product was obtained in a time-efficient manner via a phase conversion from CaHPO4·2H2O at 230 °C in just 1 h. Structural properties of the obtained material were comprehensively characterized by X-ray diffraction analysis and FTIR, Raman, and EPR spectroscopy. It was determined that in the as-prepared material, Fe ions mainly exist in a reduced divalent state in accordance with the peculiarities of the WH crystal structure. Magnetic studies also revealed paramagnetic behavior of Fe-WH in the temperature range from 5 to 300 K. Upon annealing, the Fe-WH structure decomposed, forming Fe-doped β-Ca3(PO4)2 and Ca2P2O7. Thermally induced decomposition was accompanied by the oxidation of Fe2+ to Fe3+. The biocompatibility of the synthesized material was assessed by in vitro cytotoxicity experiments with the MC3T3-E1 preosteoblastic cell line. The investigated Fe-WH powder did not show a cytotoxic effect on the cells at all studied concentrations, demonstrating its high biocompatibility.