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Nowadays, conductive iron-containing materials (i.e., Fe3O4 and zerovalent iron) have attracted greatly attention in improving medium-chain carboxylic acids (MCCA) from waste activated sludge (WAS). However, the feasibility and mechanism of semi-conductive iron oxide, i.e., ferric oxide (Fe2O3), in stimulating MCCA synthesis from WAS via ethanol-driven chain elongation (CE) has been unclear. Therefore, this work is aimed to fill up the knowledge gap. Results showed that the MCCA yield in the Fe2O3-supplemented fermenter attained at 9162 mg COD/L (i.e., 6268 mg COD/L caproate and 2895 mg COD/L caprylate), which was 2.4 times that of the control system. Kinetic analysis proved that Fe2O3 enhanced both the potential and rate of MCCA synthesis. Mechanism analysis indicated that Fe2O3 facilitated the individual steps for MCCA production, i.e., hydrolysis, acidification and CE. Further investigation disclosed that the dissimilatory iron reduction (DIR) induced by Fe2O3 corrosion and released ferrous ions improved enzymes activities of hydrolysis and acidification, while the promotion of CE was mainly ascribed to increased electron transfer efficiency by crystalline Fe2O3. Further, Fe2O3 promotes electron transfer through several mechanisms, including stimulating extracellular polymeric substance (EPS) excretion, increasing EPS electroactivity, and enhancing electron transport system activity. Microbial analysis revealed that Fe2O3 induced microflora structure shifting towards substrates transformation, iron reduction and MCCA generation, and up-regulated the key enzymes in CE pathways. This work provides an efficient strategy for MCCA generation and WAS management.