Particle size is a determinant of iron (Fe) absorption from poorly soluble Fe compounds. Decreasing the particle size of metallic Fe and ferric pyrophosphate added to foods increases Fe absorption. The aim of this study was to develop and characterize nanoparticles of FePO4 and determine their bioavailability and potential toxicity in rats. Amorphous FePO4 nanopowders with spherical structure were synthesized by flame spray pyrolysis (FSP). The nanopowders were characterized and compared with commercially available FePO4 and FeSO4, including measurements of specific surface area (SSA), structure by transmission electron microscopy, in vitro solubility at pH 1 and 2, and relative bioavailability value (RBV) to FeSO4 in rats using the hemoglobin repletion method. In the latter, the potential toxicity after Fe repletion was assessed by histological examination and measurement of thiobarbituric acid reactive substances (TBARS). The commercial FePO4 and the 2 FePO4 produced by FSP (mean particle sizes, 30.5 and 10.7 nm) had the following characteristics: SSA: 32.6, 68.6, 194.7 m2/g; in vitro solubility after 30 min at pH 1: 73, 79, and 85% of FeSO4; and RBV: 61, 70, and 96%, respectively. In the histological examinations and TBARS analysis, there were no indications of toxicity. In conclusion, nanoparticles of FePO4 have a solubility and RBV not significantly different from FeSO4. Reducing poorly soluble Fe compounds to nanoscale may increase their value for human nutrition.