The complex of natural organic matter (NOM) and iron minerals in sediment is the main host and source of groundwater iodine. However, the transformation pathways of the complex remain unclear. The groundwater and sediment from the Hetao Basin were collected in this study to analyze multi-isotopes, NOM molecular characteristics, and iron mineral phases. The results showed that high-iodine groundwater was mainly observed in the discharge area, where biodegradation of NOM, sulfate reduction and methanogenesis occurred. Compared to the shallow clayey sediments, the confined sandy sediments had lower iodine content, a lower fraction of crystalline iron oxides, and a higher fraction of carbonate associated Fe(II) minerals, suggesting that the release of sediment iodine in the aquifer is related to the transformation of sediment Fe(III) hydroxides/oxides. Moreover, the molecular features of high-iodine groundwater NOM and sandy sediment NOM were characterized by a higher proportion of refractory compounds, suggesting that the reductive transformation of sediment Fe(III) hydroxides/oxides is fueled by degradable organic compounds. The microbial Fe-reducing and/or sulfate-reducing processes cause the enrichment of groundwater iodine in the form of iodide via the transformation of iodine species. These findings provide new insights into the genesis of high-iodine groundwater.