In acidic, coal mining lake sediments, facultatively anaerobic Acidiphilium species are probably involved in the reduction of Fe(III). Previous results indicate that these bacteria can co-respire O2 and Fe(III). In this study, we investigated the capacity of the sediment microbiota to reduce Fe(III) in the presence of O2 at pH 3. In sediment microcosms with 4% O2 in the headspace, the concentration of Fe(II) increased at a rate of 1.03 μmol (g wet sediment)−1 day−1 within the first 7 days of incubation which was similar to the rate obtained with controls incubated under anoxic conditions. However, in microcosms incubated under air, Fe(II) was consumed after a lag phase of 8 h with a rate of 2.66 μmol (g wet sediment)−1 day−1. Acidiphilium cryptum JF-5, isolated from this sediment, reduced soluble Fe(III) with either 4 or 21% O2 in the headspace, and concomitantly consumed O2. However, the rate of Fe(II) formation normalized for cell density decreased under oxic conditions. Schwertmannite, the predominant Fe(III)-mineral of this sediment, was also reduced by A. cryptum JF-5 under oxic conditions. The rate of Fe(II) formation by A. cryptum JF-5 decreased after transfer from preincubation under air in medium lacking Fe(III). Acidiphilium cryptum JF-5 did not form Fe(II) when preincubated under air and transferred to anoxic medium containing Fe(III) and chloramphenicol, an inhibitor of protein synthesis. These results indicate that: (i) the reduction of Fe(III) can occur at low O2 concentrations in acidic sediments; (ii) Fe(II) can be oxidized at O2 concentrations near saturation; and (iii) the enzyme(s) responsible for the reduction of Fe(III) in A. cryptum JF-5 are not constitutive.