Toxicity due to excess iron can result in oxidative stress, impacting photosynthetic processes, particularly those related to the electron transport chain and CO2 assimilation. The present study investigated how oxidative damage caused by excess iron affects the hydraulic and diffusive traits and the photobiochemistry of two contrasting rice cultivars regarding their iron sensitivity. Two rice cultivars, IRGA 424 (tolerant to excess iron) and IRGA 417 (sensitive to excess iron), in V6 growth stage were submitted to four concentrations of Fe2+ (0.019 control, 2, 4, and 7 mM) in nutrient solution for 8 days. Excess Fe associated with oxidative damage in the roots decreased the leaf water potential and the root xylem sap flow in both cultivars. The tolerant cultivar IRGA 424 exhibited increased photosynthetic efficiency with a longer exposure but did not change carboxylation efficiency and stomatal conductance up to 2 mM of Fe. The sensitive cultivar experienced greater oxidative damage, which may have contributed to decreased quantum yields, specific efficiencies, and energy fluxes of PSII, thereby increasing photoinhibitory processes. Photoprotective mechanisms and antioxidant enzymes were more efficient in the tolerant cultivar IRGA 424 than in the sensitive cultivar with increased Fe concentrations. The sensitivity of rice to excess iron was associated with the inability to prevent oxidative damage in the roots, with constraints in root xylem sap flow, and with limitations in stomatal function and photobiochemical processes. This knowledge could support the development of iron-tolerant rice cultivars, contributing to increased productivity in soils with excess Fe.