Simultaneous targeting of both the tumor microenvironment and cancer cells by a single nanomedicine has not been reported to date. Here, we report the dual properties of zero-valent-iron nanoparticle (ZVI-NP) to induce cancer-specific cytotoxicity and anti-cancer immunity. Cancer-specific cytotoxicity induced by ZVI-NP was determined by MTT assay. Mitochondria functional assay, immunofluorescence staining, Western blot, RT-qPCR, and ChIP-qPCR assays were used to dissect the mechanism underlying ZVI-NP-induced ferroptotic cancer cell death. The therapeutic potential of ZVI-NP was evaluated in immunocompetent mice and humanized mice. Immune cell profiles of allografts and cultured immune cells were examined by flow cytometry analysis, RT-qPCR assay, and immunofluorescence. ZVI-NP caused mitochondria dysfunction, intracellular oxidative stress, and lipid peroxidation, leading to ferroptotic death of lung cancer cells. Degradation of NRF2 by GSK3/β-TrCP through AMPK/mTOR activation was enhanced in such cancer-specific ferroptosis. In addition, ZVI-NP attenuated self-renewal ability of cancer and downregulated angiogenesis-related genes. Importantly, ZVI-NP augmented anti-tumor immunity by shifting pro-tumor M2 macrophages to anti-tumor M1, decreasing the population of regulatory T cells, downregulating PD-1 and CTLA4 in CD8 T cells to potentiate their cytolytic activity against cancer cells, while attenuating PD-L1 expression in cancer cells and in tumor-bearing immunocompetent mice. In particular, ZVI-NPs preferentially accumulated in tumor and lung tissues, leading to prominent suppression of tumor growth and metastasis. This dual-functional nanomedicine established an effective strategy to synergistically induce ferroptotic cancer cell death and reprogram the immunosuppressive microenvironment, which highlights the potential of ZVI-NP as an advanced integrated anti-cancer strategy.