Tantalum-tantalum carbide (Ta-TaC) core–shell rod-reinforced iron-based composites were designed and fabricated by in situ solid-phase diffusion reaction at 1150 °C for 5, 10, 15, 20, and 80 min, respectively. Phase composition, microstructure, impact toughness, micro-hardness, and elastic modulus of the composite, morphologies and grain sizes of TaCs were investigated by X-ray diffraction, scanning electron microscopy, transmission electron microscopy, impact test, and nano-indentation test. Furthermore, formation kinetics of TaC-Fe shell layer was analyzed by measuring the thickness of pure TaC layer as a function of heat treatment time and temperature. Results indicated the generation of dense and compact TaC layer around the Ta rod by in situ solid-phase diffusion reaction, and together they were designated as the Ta-TaC core–shell rod. Predominant features of the Ta-TaC core–shell rod included a gradient nanostructured TaC-Fe shell layer and a Ta core. Predominant phases of the Ta-TaC core–shell rod-reinforced iron-based composite were Ta, TaC, and α-Fe phases. Kinetic results of TaC-Fe shell layer exhibited parabolic relationship between the thickness of pure TaC layer and annealing time, and growth rate constant for pure TaC layer was estimated to be 6.25 × 10−8 cm2 s−1. TaC particles in TaC-Fe shell layer preferred a perfect cube morphology enclosed by {100} facets with minimized total surface free energy. Grain size of TaC increased gradually from about 150 to 500 nm with the increasing distance from the interface of Ta core/TaC-Fe shell layer to the substrate. The Ta-TaC core–shell rods play an important role in improving the mechanical properties of the composite. Micro-hardness of the TaC-Fe shell layer was in the range of 10.4–24.8 GPa, which is 3–8 times than that of the substrate due to the dense and compact TaC. Impact toughness of the composite was 100.6 J cm−2, which is markedly higher than that of the gray cast iron (7.8 J cm−2). Excellent impact toughness of the composite is mainly attributed to Ta core of Ta-TaC core–shell rod, which undergoes a large plastic deformation under external forces. Moreover, the compact TaC distributed around Ta rod reduced split action to the matrix, and the matrix absorbed large amount of crack propagation energy.