Aqueous rechargeable batteries (ARBs) are generally safer than non-aqueous analogues, they are also less-expensive, and more friendly to the environment. However, the inherent disadvantage of the narrow electrochemical window of H₂O seriously restricts the energy density and output voltage of ARBs, especially aqueous rechargeable Fe-based batteries. Herein, we introduce a new battery system: the anode contains C@Fe/Fe₂O₃ composite, which is interfaced with an alkaline electrolyte; the cathode contains LiMn₂O₄ in contact with a neutral electrolyte. A Li⁺-conducting membrane is carefully selected to decouple the electrode–electrolyte, which effectively widens the electrochemical window to above 2.65 V, thereby enables an aqueous rechargeable iron battery. Its average output voltage is 1.83 V and its energy density is 235.3 Wh/kg at 549 W/kg. In this work, we propose the energy storage mechanism with the aid of density functional theory (DFT). The calculated reduction potential of the anode agrees with the experimental value. Furthermore, this battery system demonstrates long cycle lifespan of approximately 2500 cycles at 2 A/g, corresponding to a capacity retention of 82.1%. These results are very far superior than those of mainstream aqueous rechargeable Fe-based batteries, which guarantee future investigation for storing electricity energy.