Cellular labile iron, which contains chelatable redox-active Fe2+, has been implicated in iron-mediated cellular toxicity leading to multiple organ dysfunction. Iron homeostasis is controlled by monocytes/macrophages through their iron recycling and storage capacities. Furthermore, iron sequestration by monocytes/macrophages is regulated by pro-inflammatory cytokines including interleukin-1, highlighting the importance of these cells in the crosstalk between inflammation and iron homeostasis. However, a role for cellular labile iron in monocyte/macrophage-mediated inflammatory responses has not been defined. Here we describe how cellular labile iron activates the NLRP3 inflammasome in human monocytes. Stimulation of lipopolysaccharide-primed peripheral blood mononuclear cells with ferric ammonium citrate increases the level of cellular Fe2+ levels in monocytes and induces production of interleukin-1β in a dose-dependent manner. This ferric ammonium citrate-induced interleukin-1β production is dependent on caspase-1 and is significantly inhibited by an Fe2+-specific chelator. Ferric ammonium citrate consistently induced interleukin-1β secretion in THP1 cells, but not in NLRP3-deficient THP1 cells, indicating a requirement for the NLRP3 inflammasome. Additionally, activation of the inflammasome is mediated by potassium efflux, reactive oxygen species-mediated mitochondrial dysfunction, and lysosomal membrane permeabilization. Thus, these results suggest that monocytes/macrophages not only sequestrate iron during inflammation, but also mediate inflammation in response to cellular labile iron, which provides novel insights into the role of iron in chronic inflammation.