Functionalization of pristine graphene by hydrogen and fluorine is well studied, resulting in graphane and fluorographene structures. In contrast, functionalization of pristine graphene with iodine has not been reported. Here, the functionalization of graphene with iodine using photochemical activation is presented, which is thermally reversible at 400°C. Additional dispersive dominant Raman modes that are probed by resonance Raman spectroscopy are observed. Additionally, iodinated graphene is probed by Kelvin probe force microscopy and by transport measurements showing p-doping surpassing non-covalent iodine doping by charge transfer-complex formation. The emergent Raman modes combined with strong p-doping indicate that iodine functionalization is distinct from simple iodine doping. A reaction mechanism based on these findings is proposed, identifying the large size of iodine atoms as the probable cause governing regiochemically controlled addition due to steric hinderance of reactive sites. The modification of the electronic structure is explained by the confinement of 1D trans-oligoene chains between sp3-defects. These results demonstrate the uniqueness of iodine reactivity toward graphene and the modification of the electronic structure of iodinated graphene, highlighting its dependence on the spatial arrangement of substituents.