Rice, a staple food for more than half of the world population, is an affordable source of calorie, satisfying more than 20% of the calorie requirement on a global scale. Its cultivation is threatened by multiple challenges, including droughts, floods, salinity, and depletion of micronutrients pool or enrichment of micronutrients at a toxic level. Inorganic minerals play a crucial role in regulating different metabolic activities in plants. Iron (Fe) is among such essential micronutrients involved in a variety of metabolic processes, such as photosynthesis, chlorophyll synthesis, mitochondrial respiration, nucleic acids synthesis/repair, and maintenance of chloroplast ultrastructure/function. Iron is also a component of essential proteins like heme and acts as a cofactor of certain enzymes working as an accepter or a donor of protons. Iron deficiency and excess are the most prevalent soil-related micronutrient disorders in lowland rice production systems. Phytotoxicity caused by large concentrations of ferrous Fe (Fe2+) in the soil solution in reduced soil and substantial associated yield losses could pose a serious threat to regional and global food security. Traditional rice cultivation practice under continuous flooding notably features an ideal reduction potential for prevalent and rapidly progressing Fe toxicity primarily affecting lowland rice production. Advancements in rice cultivar development with improved tolerance and adjustments of proper management strategies to address Fe toxicity at the field level have been quite challenging due to a poor understanding of plant internal tolerance mechanism and soil properties regulating Fe availability and toxicity. Rice varieties for low pH tolerance, developed in the past through conventional breeding approaches, were somewhat indirectly contributed to Fe toxicity tolerance. During the past two decades, a considerable breakthrough has been made in understanding the genetics, physiology, and biomolecular aspects of Fe toxicity tolerance in rice. Extensive studies across different Fe-toxic environments have also highlighted the marginal difference among Fe deficiency, adequacy, and toxicity ranges both in the soil and plant systems. Despite the complexity, there is a necessity for systematic understanding and integration between the available knowledge of soil Fe regulation and transport as well as plant internal tolerance mechanism for stepping forward in strategizing rice improvement programs. Hence, an in-depth understanding of Fe availability, uptake, and translocation from soil to plant is needed. Therefore, the present review highlights an intricate approach to congregate the excess Fe regulation in soil coupled with cellular Fe toxicity tolerance of rice and management options in alleviating the negative effects of Fe toxicity on the performance of lowland rice, that could potentially offer invaluable information for rice improvement programs.