A new method for manufacturing iron foam using CO and CO₂ as foaming gases was studied. This method consists of three stages: (1) mixing powders of pure iron, graphite, and hematite; (2) preparing the precursor by cold pressing the mixed powders; and (3) foaming by heating the precursor at temperatures between the liquidus and solidus in the Fe–C binary system. Molten iron containing carbon is foamed by gases generated by a reduction reaction. Optimizations of both the composition of the precursor and the heating conditions are required to produce the iron foam with high porosity. It was found that the content and powder size of hematite in the precursor significantly affect the porosity and pore diameter of the iron foam. Iron foam with a porosity of 55% and average pore diameter of around 500 μm is obtained by heating the precursor of Fe-3.1 mass%C-1.0 mass%Fe₂O₃ at 1543 K.