Nickel mining activities in Kolaka Regency, Southeast Sulawesi, Indonesia, have generated acid mine drainage (AMD) that contaminates adjacent agricultural land, including the paddy fields of Pesouha Village, Pomalaa Sub-district. This study investigated the accumulation of iron (Fe) in paddy soils and rice grains across an AMD contamination gradient and evaluated its implications for rice plant growth and grain quality. Sampling was conducted at four stations positioned at increasing distances from an AMD-affected irrigation channel: station 1 (200 m), station 2 (500 m), station 3 (2 km), and station 4 as an uncontaminated control (4 km), with three independent replicate plots established per station for both soil and rice grain analyses. Fe concentrations in soil and rice grain were quantified by Atomic Absorption Spectrophotometry, and grain quality was evaluated visually following the Indonesian National Standard (SNI 6128:2020). Soil Fe concentrations were 3.10, 2.92, 2.17, and 1.19 mg/kg at stations 1 through 4, respectively, all exceeding the permissible threshold of 0.5 mg/kg set by SNI and WHO guidelines. Grain Fe content followed a different pattern, with the highest concentration recorded at station 1 (156 mg/kg), followed by the control station 4 (115 mg/kg), station 2 (66.67 mg/kg), and station 3 (50.13 mg/kg); all values substantially exceeded the WHO/FAO safe limit of 5–10 mg/kg for food commodities. Rice plants at contaminated stations exhibited iron toxicity symptoms, including leaf chlorosis, stunted growth, impaired root development, and reduced panicle formation, whereas the control station supported the healthiest plant growth and the highest grain quality score. Pearson correlation analysis indicated a moderate positive relationship between grain Fe content and grain quality score (r = 0.55), although this correlation was not statistically significant (p > 0.05), likely reflecting the limited number of stations (n = 4). The observed relationships should be regarded as preliminary and require validation using a larger number of independent sampling sites.These findings illustrate the dual role of Fe as both an essential nutrient and a potential contaminant, and underscore the urgent need for continuous monitoring and management of irrigation water quality in agricultural areas adjacent to nickel mining operations.