Elemental mercury (Hg0) emission from industrial boilers equipped in factories such as coal-fired power plants poses serious hazards to the environment and human health. Herein, an iron-modified biomass carbon (Fe/BC) magnetic adsorbent was prepared by a one-step method using pepper straw waste as raw material and potassium oxalate and ferric nitrate as activator and catalyst precursor, respectively. A fixed-bed reactor was used to evaluate the Hg0 removal performance of the Fe/BC adsorbent. The synthesized adsorbent showed a wide temperature window for Hg0 removal. In a N2 + O2 atmosphere, the removal efficiency toward Hg0 was 97.6% at 150 °C. Further, O2 or SO2 could promote the removal of Hg0, while NO could inhibit the conversion of Hg0 over the Fe/BC adsorbent. The consequence of XPS and Hg-TPD showed that lattice oxygen in Fe2O3 and chemisorbed oxygen were the main active sites for Hg0 removal, and HgO was the main mercury species on used Fe/BC. Moreover, Fe/BC adsorbent showed a good regeneration and magnetization performance, which was conducive to the cost reduction of actual industrial application. This study provides a facile approach for efficient removal of Hg0 using biomass-derived carbon material.