Iron deficiency anemia (IDA) is a global health concern that is affecting all age groups significantly. Among many of the existing methods, the fortification of foods with iron salts is the best and most cost-effective strategy for targeting large-scale populations to provide nutritional security. The fortification of foods with iron salts is a challenging task because most iron complexes (ferrous sulfate, ferrous chloride) used in fortification are highly water-soluble, which impart unacceptable organoleptic changes in food vehicles and also causes gastrointestinal problems. However, insoluble iron salts (ferric pyrophosphate) do not cause unacceptable taste or color in food vehicles but low bioavailable. Nanosized iron salts can overcome these concerns. The particle size of iron salts has been reported to play an important role in the absorption of iron. Reduction in the particle size of iron compounds increases its surface area, which in turn improves its solubility in the gastric juice leading to higher absorption. Nanosized iron compound produces minimal organoleptic changes in food vehicles compared to water-soluble iron complexes. Thus nanosized iron salts find potential applications in food fortification to reduce IDA. This paper focuses on providing a complete review of the various iron salts used in IDA, including their bioavailability, the challenges to food fortification, the effects of nanosized iron salts on IDA, and their applications in food fortification. Fortification of foods with water-soluble Fe salts imparts unacceptable organoleptic changes in food vehicle and adverse impact on health. However, insoluble iron salts do not cause unacceptable taste or color in food vehicles but low bioavailable. Using Nano-sized iron compound produces minimal organoleptic changes in food vehicles compared to changes produced by water-soluble iron complexes, improves Fe absorption in the gastrointestinal tract and does not cause any health issues.