Despite observational studies linking brain iron levels to psychiatric disorders, the exact causal relationship remains poorly understood. This study aims to examine the relationship between iron levels in specific subcortical brain regions and the risk of psychiatric disorders. Utilizing two-sample Mendelian randomization (MR) analysis, this study investigates the causal associations between iron level changes in 16 subcortical nuclei and eight major psychiatric disorders, including schizophrenia (SCZ), major depressive disorder (MDD), autism spectrum disorders (ASD), attention-deficit/hyperactivity disorder, bipolar disorder, anxiety disorders, obsessive-compulsive disorder, and insomnia. The genetic instrumental variables linked to iron levels and psychiatric disorders were derived from the genome-wide association studies data of the UK Biobank Brain Imaging and Psychiatric Genomics Consortium. Bidirectional causal estimation was primarily obtained using the inverse variance weighting (IVW) method. Iron levels in the left substantia nigra showed a negative association with the risk of MDD (OR = 0.94, 95% CI = 0.91-0.97, p < 0.001) and trends with risk of SCZ (OR = 0.90, 95% CI = 0.82-0.98, p = 0.020). Conversely, iron levels in the left putamen were positively associated with the risk of ASD (OR = 1.11, 95% CI = 1.04-1.19, p = 0.002). Additionally, several bidirectional trends were observed between subcortical iron levels and the risk for psychiatric disorders. Lower iron levels in the left substantia nigra may increase the risk of MDD, and potentially increase the risk of SCZ, indicating a potential shared pathogenic mechanism. Higher iron levels in the left putamen may lead to the development of ASD. The observed bidirectional trends between subcortical iron levels and psychiatric disorders, indicate the importance of the underlying biomechanical interactions between brain iron regulation and these disorders.