Iron nodules with irregular shapes are hard cemented materials with high concentrations of Fe oxide, and generally occur in soils associated with frequent wetting/drying cycles or with poor drainage. The presence or absence of iron nodules does not affect the taxa of soil classification, but they always indicate the soil genetic environments. An Ultisol located on a low-elevation terrace in central Taiwan was selected in this study to investigate the morphological characteristics, chemical properties, and pedogenic processes of iron nodules. The results indicate that the sizes and amounts of iron nodules increase with increasing soil depth. Free iron contents in the iron nodules are higher than those in the soil matrices, but the Feo-/Fed-values in the iron nodules are very low. The major driving force promoting the formation of iron nodules is in situ weathering from saprolites by frequently alternating wetting/drying cycles, while illuviated iron only played a minor role in this formation.