The mechanism of the reactions of aryl/heteroaryl halides with aryl Grignard reagents catalyzed by [Fe(III)(acac)3] (acac=acetylacetonate) has been investigated. It is shown that in the presence of excess PhMgBr, [Fe(III)(acac)3] affords two reduced complexes: [PhFe(II)(acac)(thf)n] (n=1 or 2) (characterized by (1)H NMR and cyclic voltammetry) and [PhFe(I)(acac)(thf)](-) (characterized by cyclic voltammetry, (1)H NMR, EPR and DFT). Whereas [PhFe(II)(acac)(thf)n] does not react with any of the investigated aryl or heteroaryl halides, the Fe(I) complex [PhFe(I)(acac)(thf)](-) reacts with ArX (Ar=Ph, 4-tolyl; X=I, Br) through an inner-sphere monoelectronic reduction (promoted by halogen bonding) to afford the corresponding arene ArH together with the Grignard homocoupling product PhPh. In contrast, [PhFe(I)(acac)(thf)](-) reacts with a heteroaryl chloride (2-chloropyridine) to afford the cross-coupling product (2-phenylpyridine) through an oxidative addition/reductive elimination sequence. The mechanism of the reaction of [PhFe(I)(acac)(thf)](-) with the aryl and heteroaryl halides has been explored on the basis of DFT calculations.