When iron rusts, it undergoes a redox reaction. This means that iron reacts with oxygen in the presence of water to form hydrated iron(III) oxide, commonly known as rust. This reaction involves the transfer of electrons from the iron to the oxygen, which causes the iron to become oxidized and the oxygen to become reduced. Rust is a reddish-brown substance that weakens and destroys iron over time, which is why it's important to prevent rust from forming on metal objects.