Iron (Fe) deficiency is one of the common causes of anaemia in humans. Improving grain Fe in rice, therefore, could have a positive impact for humans worldwide, especially for those people who consume rice as a staple food. In this study, 225–269 accessions of the Bengal and Assam Aus Panel (BAAP) were investigated for their accumulation of grain Fe in two consecutive years in a field experiment under alternative wetting and drying (AWD) and continuous flooded (CF) irrigation. AWD reduced straw Fe by 40% and grain Fe by 5.5–13%. Genotype differences accounted for 35% of the variation in grain Fe, while genotype by irrigation interaction accounted for 12% of the variation in straw and grain Fe in year 1, with no significant interactions detected in year 2. Twelve rice accessions were identified as having high grain Fe for both years regardless of irrigation treatment, half of which were from BAAP aus subgroup 3 which prominently comes from Bangladesh. On average, subgroup 3 had higher grain Fe than the other four subgroups of aus. Genome-wide association mapping identified 6 genomic loci controlling natural variation of grain Fe concentration in plants grown under AWD. For one QTL, nicotianamine synthase OsNAS3 is proposed as candidate for controlling natural variation of grain Fe in rice. The BAAP contains three haplotypes of OsNAS3 where one haplotype (detected in 31% of the individuals) increased grain Fe up to 11%. Haplotype analysis of this gene in rice suggests that the ability to detect the QTL is enhanced in the BAAP because the high Fe allele is balanced in aus, unlike indica and japonica subgroups.