Two-dimensional (2D) layered ultrathin bismuth oxychloride nanoplate (BiOCl-UTN) photocatalysts are highly active only under ultraviolet light (energy band gap E_g: 3.0–3.1 eV). Herein, unlike using conventional closed-vessel high-temperature synthetic routes, we prepared unprecedented well-crystalline 2D Fe³⁺ ion-incorporated BiOCl-UTNs [Fe(III)-BiOCl-UTNs] having ultrathin thicknesses of about 4–5 nm and planar sizes of about 30–50 nm in an open vessel at room temperature and then used in photocatalysis under visible light. The present approach is poly(sodium 4-styrenesulfonate) (PSS)-aided, in which the formation of the distinct intermediate composite [PSS-Bi(OCH₂CH₂OH)-Fe³⁺] significantly inhibits the habitual spontaneous growth of BiOCl along the ⟨001⟩ plane and results in Fe(III)-BiOCl-UTNs. The synthesis shows robust reproducibility and allows large-scale production (5.2 g) with a well-controlled morphology, size, and thickness. Instead of using a tedious high-speed centrifugation process, the Fe(III)-BiOCl-UTN product is obtained via electrolyte sedimentation which is facile and cost-effective. The successful doping of Fe³⁺ ions into BiOCl-UTNs, the sustainable layered structure, and the stable lattice arrangement endow Fe(III)-BiOCl-UTNs with a narrower band gap (E_g: 2.55 eV). As-prepared Fe(III)-BiOCl-UTNs exhibit enhanced separation of photoexcited electrons–holes, rapid transfer of excited electrons to the surface, and significant potential to suppress electron–hole recombination. Consequently, under visible light, Fe(III)-BiOCl-UTNs achieved a substantially improved catalytic performance (>99%, five-cycle recyclability) to photoreduce Cr(VI) ions and photodegrade rhodamine B from aqueous solutions. The present performance surpasses pristine BiOCl-UTNs and state-of-the-art photocatalysts. Moreover, we disclosed the morphological optimization, predominant role of e^– and ^•O₂ radicals, and typical photocatalytic reaction mechanism. This work offers the first facile and cost-effective alternative to fabricate the iron-doped layered photocatalyst with superior catalytic activity, extendable for other functional materials and diverse practical applications.