This study investigates the performance of a sponge membrane bioreactor (SMBR) integrated with waste iron scraps as an innovative approach to enhance nitrogen removal from municipal wastewater. The incorporation of iron scraps substantially improved the total nitrogen (TN) removal efficiency, increasing from 35.3 ± 10.4 % to 62.4 ± 26.9 %, while maintaining stable chemical oxygen demand (COD) removal above 90 % and ammonium removal greater than 80 % at an iron dosage of 60 g/L. Iron supplementation promoted denitrification by creating localized anoxic microenvironments and stimulating the enrichment of iron-reducing and denitrifying bacteria such as Geothrix, Aquabacterium, and Roseiarcus, with relative abundances increasing from 0.2 % to 6.1 %, 1.4 %–4.8 %, and 0.8 %–1.5 %, respectively. Microbial community analysis further revealed significant shifts in dominant phyla, including Proteobacteria, Acidobacteriota, and Bacteroidota, with relative abundances increased from 68.3 % to 70.1 %, 2.0 %–9.1 %, and 1.0 %–7.8 %, respectively. These shifts indicate strengthened nitrogen transformation pathways within the system. These findings demonstrate that the reuse of waste iron scraps as bioactive carriers is an effective and environmentally sustainable strategy for enhancing nitrogen removal efficiency and microbial functional diversity in SMBR.