In rice paddy soil, biological nitrogen fixation is important for sustaining soil nitrogen fertility and rice growth. Anaeromyxobacter and Geobacteriaceae, iron-reducing bacteria belonging to Deltaproteobacteria, are newly discovered nitrogen-fixing bacteria dominant in paddy soils. They utilize acetate, a straw-derived major carbon compound in paddy soil, as a carbon and energy source, and ferric iron compounds as electron acceptors for anaerobic respiration. In our previous paddy field experiments, a significant increase in soil nitrogen-fixing activity was observed after the application of iron powder to straw-returned paddy field soil. In addition, combining iron application with 60–80% of the conventional nitrogen fertilizer rate could maintain rice yields similar to those with the conventional nitrogen fertilization rate. It was thus suggested that iron application to paddy soil increased the amount of nitrogen fixed in the soil by enhancing nitrogen fixation by diazotrophic iron-reducing bacteria. The present study was conducted to directly verify this suggestion by 15N-IRMS analysis combined with 15N-DNA-stable isotope probing of iron-applied and no-iron-applied plot soils in an experimental paddy field. In no-iron-applied native paddy soil, atmospheric 15N2 was incorporated into the soil by biological nitrogen fixation, in which diazotrophic iron-reducing bacteria were the most active drivers of nitrogen fixation. In iron-applied paddy soil, the amount of 15N incorporated into the soil was significantly higher due to enhanced biological nitrogen fixation, especially via diazotrophic iron-reducing bacteria, the most active drivers of nitrogen fixation in the soil. Thus, our previous suggestion was verified. This study provided a novel picture of active nitrogen-fixing microorganisms dominated by diazotrophic iron-reducing bacteria in paddy soil, and directly proved the effectiveness of iron application to enhance their nitrogen fixation and increase the incorporation of atmospheric nitrogen into soil. The enhancement of biological nitrogen fixation in paddy fields by iron application may lead to novel and unique paddy soil management strategies to increase soil nitrogen fertility and ensure rice yields with reduced nitrogen fertilizer input and lower environmental nitrogen burdens.