The design of photocatalysts for the stable and efficient photocatalytic reduction of CO2 without sacrificial agents remains challenging. In this study, Fe atoms were anchored on the surface of TiO2 with atomic-level dispersion using a novel negative-pressure encapsulation and pyrolysis strategy. The photoelectrochemical test results confirmed that the introduction of single Fe atoms accelerated the separation of photogenerated carriers and enhanced the TiO2 utilization rate of visible light. The optimal catalyst with atomically dispersed Fe showed excellent photocatalytic conversion of CO2 to CO (48.2 μmol·g−1·h−1) and CH4 (113.4 μmol·g−1·h−1), whereas the TiO2 system produced only trace amounts of CO (2.7 μmol·g−1·h−1). The increased CO2 adsorption energy and movement of the d-band center toward the Fermi level confirmed that single Fe sites were more favorable for the adsorption of CO2. The differential charge density distribution of CO2 adsorbed on the catalyst surface confirmed the rapid transfer of electrons along the Ti-O-Fe-C path, and the Gibbs free energy calculation further confirmed that the Fe sites were conducive to reducing the energy barrier required for the reaction. In addition, the key intermediate (*COOH) of CO2 conversion to CH4 was detected by in situ diffuse reflectance infrared Fourier transform spectroscopy, and a possible reaction pathway was proposed. This work provides an effective strategy for designing single-atom catalysts that can efficiently reduce CO2 to high-value-added products.