It has recently been demonstrated that hydrothermal vents are an important source of dissolved Fe (dFe) to the Southern Ocean. The isotopic composition (δ56Fe) of dFe in vent fluids appears to be distinct from other sources of dFe to the deep ocean, but the evolution of δ56Fe during mixing between vent fluids and seawater is poorly constrained. Here we present the evolution of δ56Fe for dFe in hydrothermal fluids and dispersing plumes from two sites in the East Scotia Sea. We show that δ56Fe values in the buoyant plume are distinctly lower (as low as –1.19‰) than the hydrothermal fluids (–0.29‰), attributed to (1) precipitation of Fe sulfides in the early stages of mixing, and (2) partial oxidation of Fe(II) to Fe(III), >55% of which subsequently precipitates as Fe oxyhydroxides. By contrast, the δ56Fe signature of stabilized dFe in the neutrally buoyant plume is –0.3‰ to –0.5‰. This cannot be explained by continued dilution of the buoyant plume with background seawater; rather, we suggest that isotope fractionation of dFe occurs during plume dilution due to Fe ligand complexation and exchange with labile particulate Fe. The δ56Fe signature of stabilized hydrothermal dFe in the East Scotia Sea is distinct from background seawater and may be used to quantify the hydrothermal dFe input to the ocean interior.