The high concentration of trivalent iron (Fe3+) and sulfate (SO4 2-) ions in coal mine gushing water is a major ecological hazard and difficult to treat industrially. In this paper, effective purification of coal mine gushing water was achieved by the two-step cyclic process using zero-valent iron (ZVI) powder and hydrogen peroxide. We investigated the effect of different doses of ZVI and hydrogen peroxide on the removal of Fe3+ and SO4 2-. Single-factor experiments indicated that as the dosage of ZVI increased, the removal of Fe3+ increased and then decreased, with the highest Fe3+ removal rate approaching 100% at the ZVI dosage of 100 mg/L, while the maximum removal rate of SO4 2- for sulphate was achieved at 400 ppm of hydrogen peroxide. The precipitate produced in the purification system was characterized and the results demonstrated that it was a typical secondary mineral, schwertmannite, and that it contained considerably more iron and sulfate than the precipitate formed by the natural sedimentation process in coal mine gushing water. Overall, after the two-step cycle process, Fe3+ and SO4 2- can be effectively removed via the formation of schwertmannite, and the ion concentrations all meet the discharge standards for Chinese mining industry wastewater.