Aerobic granular sludge (AGS) has attracted the attention of researchers because of its characteristics of high pollutant degradation efficiency, less land occupying, and low energy consumption. However, the application of AGS on treating low-strength wastewater is facing some problems, such as long period requirement for AGS formation and poor operation stability. In this study, Fe3+ was employed to enhance the AGS formation and stability. The AGS was cultivated in a sequencing batch reactor (SBR) and the influent wastewater COD was set at 150 mg/L (considering as low-strength wastewater). The results showed that AGS was formed rapidly within 7 days when Fe3+ was added to the influent, and the removal efficiency of COD, NH4+-N, TN and TP were 81%, 96%, 35% and 33%, respectively. However, no AGS was observed in the control group (without Fe3+) and the pollutant removal was low. It was found that the extracellular protein content in the AGS was about 150 mg/g MLSS higher than that of the control group. On day 47, the particle size of AGS reached 669 μm. Three-dimensional fluorescence spectrum analysis shows that Fe3+ could stimulate the production of tryptophan and tyrosine proteins. By Fourier transform infrared spectroscopy analysis, Fe3+ can stimulate the production of aspartic protein, tyrosine protein and amide I band. From Laser Confocal Microscopy analysis, it was found that Fe3+ could stimulate the production of β-exopolysaccharides. In fact, the above mentioned substances have great contribution to the formation and stability of AGS. In addition, Fe3+ could stimulate stimulate the growth of Zoogloea to enhance the secretion of extracellular polymeric substance (EPS) and stimulate the growth of Pseudoxanthomonas to improve the stability of aerobic granular sludge. The study has provided a new strategy for AGS application in low-strength wastewater treatment.