Froth flotation of fine minerals has always been an important research direction in terms of theory and practice. In this paper, the effect and mechanism of Fe³⁺ on improving surface hydrophobicity and flotation of fine monazite using sodium octyl hydroxamate (SOH) as a collector were investigated through a series of laboratory tests and detection measurements including microflotation, fluorescence spectrum, zeta potential, and X-ray photoelectron spectroscopy (XPS). Flotation tests have shown that fine monazite particles (−26 + 15 μm) cannot be floated well with the SOH collector compared to the coarse fraction (−74 + 38 μm). However, adding a small amount of Fe³⁺ to the pulp before SOH can significantly improve the flotation of fine monazite. This is because the addition of Fe³⁺ promotes the adsorption of SOH and greatly improves the hydrophobicity of the monazite surface. This can result in the formation of a more uniform and dense hydrophobic adsorption layer, as shown by the fluorescence spectrum and zeta potential results. From the XPS results, Fe³⁺ reacts with surface O atoms on the surface of monazite to form a monazite–O_surf–Fe group that acts as a new additional active site for SOH adsorption. A schematic model was also proposed to explain the mechanism of Fe³⁺ for improving surface hydrophobicity and flotation of fine monazite using octyl hydroxamate as a collector. The innovative point of this study is using a simple reagent scheme to float fine mineral particles rather than traditional complex processes.