Peracetic acid (PAA) has recently been considered a promising oxidant candidate for heterogeneous Fenton-like reactions; however, the main generation and contribution of organic radicals (R-O•) with unsatisfactory oxidation potential compromises wastewater decontamination efficiency. In this study, we demonstrate the rational design and synthesis of ultrafine FeOx nanocluster-anchored carbonaceous nanosheets (UFe-CN) for altering the PAA activation pathway from R-O• to •OH dominant process via in situ framework collapse carbonization of MIL-53(Fe). The constructed UFe-CN/PAA system effectively accelerated refractory micropollutant (e.g., p-nitrophenol (4-NP)) decomposition by the enhanced •OH formation (up to 65.24 µmol L−1) under a wide pH range (3.0–9.0), outperforming the benchmark iron-based catalyst counterparts by 4.2–10.8 times. This outstanding Fenton-like catalytic activity of UFe-CN is primarily attributed to the significant improvement in electron mitigation, ca. 49 times higher than that of its MIL-53(Fe) counterpart, for interface catalysis reactions triggered by iron species cycling. Furthermore, to facilitate adaptive engineering, the organic pollutant removal efficiency could be easily tuned by varying several key treatment factors, including the initial pH, PAA concentration, and UFe-CN dosage. More importantly, the excellent practicality of UFe-CN/PAA was demonstrated by systematically evaluating the impact of the water matrix, catalyst regeneration capability, and wastewater treatment efficiency. Overall, this study provides a significant understanding of •OH-dominated PAA activation and an effective catalyst development paradigm to facilitate the practical application of PAA-based Fenton-like oxidation.