In addition to the adsorption and immobilization capacities of iron-modified biochars, these materials produce persistent free radicals (PFRs) that can carry out metal [i.e., Cr(VI)] redox transformations, but the primary forms and active species of PFRs involved are not well understood. Here, we investigated the key species of PFRs of α-Fe2O3-modified biochar (MBC) and their influence on Cr(VI) reduction under anaerobic conditions simulating paddy soil environments. MBC produced bulk phenoxyl PFRs that promoted Cr(VI) reduction due to the catalytic effect of the transition metal Fe. In addition, MBC was more efficient in reducing Cr(VI) under anaerobic conditions than under aerobic conditions due to the more active and accessible dissolved PFRs present in the dissolved organic matter (DOM). The electron transfer capacity of DOM was demonstrated by excitation-emission matrix (EEM) spectrophotometry combined with parallel factor analysis, which showed that the protein-like and humic-like components of DOM were involved in Cr(VI) reduction. Furthermore, Fourier transform ion cyclotron resonance mass spectrometry (FTICR-MS) analysis indicated that reduced-S compounds (O/S < 4) and carboxylic acid (–COO) groups in the unsaturated aliphatic and lignin-like compounds are potentially the main active species accelerating Cr(VI) reduction under anaerobic conditions. Our results provide new insights into the role of dissolved PFRs from iron-modified biochar in promoting Cr(VI) reduction under anaerobic conditions such as flooded soils.