Abnormal iron metabolism is closely linked to sarcopenia; however, the specific iron metabolism features of fat-infiltrating sarcopenia remain poorly understood. Proteomic sequencing revealed that in skeletal muscle with severe fat infiltration, the expression of iron utilization-related proteins was significantly downregulated, whereas that of iron uptake and storage proteins was markedly upregulated, thereby presenting an abnormal iron deficiency (ID) phenotype. Nevertheless, the mechanism by which ID drives intramuscular fat infiltration has not been fully elucidated. Using clinical samples, aged murine ID models, and in vitro cell assays, this study is the first to demonstrate that ID stabilizes hypoxia-inducible factor-1 (HIF-1), promoting aberrant adipogenic differentiation of fibro-adipogenic progenitors (FAPs), disrupting the homeostatic balance between satellite cells (SCs) and FAPs, exacerbating skeletal muscle fat infiltration, and impairing muscle repair capacity. Notably, treatment with the HIF-1 inhibitor PX478 reversed these pathological alterations and improved muscle function. Collectively, our findings identify the ID-HIF-1-FAPs axis as a key driver of intramuscular fat infiltration, offering a novel therapeutic target for the clinical management of fat-infiltrating sarcopenia.