Hydroxyapatite (HA), the main inorganic component of natural bones, is widely studied as a biomaterial due to its excellent biocompatibility and osteoinductivity. The crystal structure of HA lends itself to a wide variety of substitutions and ion doping, which allows for tailoring of material properties. In this study, iron-doped HA was synthesized via a simple ion-exchange procedure and characterized thoroughly for crystal structure and phase purity using X-ray diffraction, energy-dispersive X-ray spectroscopy, inductively coupled plasma atomic emission spectroscopy, and Fourier transform infrared spectroscopy. Magnetic properties were studied using vibrating sample magnetometer and superconducting quantum interference device analysis. Ion-exchange was attempted using both ferric and ferrous chloride iron solutions, but a substitution was only achieved using ferric chloride solution. The results showed that after iron substitution the powder retained characteristic apatite crystal structure and functional groups, but the iron-doped samples displayed paramagnetic properties, as opposed to the diamagnetism of pure HA. The effect of soaking time on iron content was also examined, and collectively X-ray diffraction and inductively coupled plasma atomic emission spectroscopy results suggested that an increase in soaking time led to an increase in iron content in the sample powder. Iron-substituted HA nanoparticles, a biomaterial with magnetic properties, could be a promising biomaterial to be used in a variety of biomedical fields, including magnetic imaging, drug delivery, or hyperthermia-based cancer treatments.