The physicochemical properties of two commercial dispersions of iron nanoparticles were studied, together with their behavior in the room-temperature degradation in basic solutions of Acid Orange 7 (AO7), studied by UV–vis spectroscopy. In one dispersion (bare-RNIP), water was the solvent, and in the other (M-RNIP) a biopolymer (sodium aspartate) was added (RNIP standing for reactive nanoscale iron particles and M for modified). The features of iron nanoparticles (size, morphology, presence of oxidized phases) were studied both in the dispersions as such and in the corresponding dried powders. A protecting role of the biopolymer was observed, as well as changes in the properties with time (aging). With bare-RNIP, the fraction of Fe3O4 (magnetite) steadily increased with time at the expense of Fe0, eventually reaching 99%, and with M-RNIP, the Fe0 content was higher at any time than with bare-RNIP: aging, however, brought about the formation of the Fe3+ compound FeOOH besides magnetite. As for AO7 degradation, a similar behavior was observed with the two fresh dispersions: with M-RNIP, degradation was complete in a few minutes, and with fresh bare-RNIP, the same process was basically observed, though at a lower rate. In both cases, successive reactions were observed as a minor feature, for which an interpretation is advanced. Aging of M-RNIP does not prevent the degradation reaction: aging in the absence of the polymer, instead, leads, after 6 months, to an entirely different process, consisting in the mere adsorption through the phenol group of AO7 onto the magnetite external layer of bare-RNIP particles. Further aging of bare-RNIP prevents also this phenomenon. The different behavior of the two dispersions relates to the composition of iron nanoparticles. Reaction with water converts Fe0 into magnetite. When Fe0 is present and the thickness of the outer magnetite layer is moderate, AO7 degradation occurs. With a thick outer layer, only adsorption is possible, which does not take place on a fully oxidized surface.