New iron complexes [Cp*FeL](-) (1-sigma and 1-pi, Cp*=C5Me5) containing the chelating phosphinine ligand 2-(2 '-pyridyl)-4,6-diphenylphosphinine (L) have been prepared, and found to undergo facile reaction with CO2 under ambient conditions. The outcome of this reaction depends on the coordination mode of the versatile ligand L. Interaction of CO2 with the isomer 1-pi, in which L binds to Fe through the phosphinine moiety in an eta(5) fashion, leads to the formation of 3-pi, in which CO2 has undergone electrophilic addition to the phosphinine group. In contrast, interaction with 1-sigma-in which L acts as a sigma-chelating [P,N] ligand-leads to product 3-sigma in which one C=O bond has been completely broken. Such CO2 cleavage reactions are extremely rare for late 3d metals, and this represents the first such example mediated by a single Fe centre.