The growth of Fe on Au(111) at 300K in the sub-monolayer regime has been investigated using scanning tunneling microscopy, focusing on the mechanisms of nucleation, coalescence and interlayer diffusion. Below a coverage of 0.1 ML, Fe growth proceeds in a well-ordered fashion producing regular arrays of islands, while approaching the island coalescence threshold (above 0.35–0.4 ML), we observed a consistent increasing of random island nucleation. These observations have been interpreted through rate equation models for the island densities in the presence of preferred nucleation sites. The evolution of the second layer fraction has also been interpreted in a rate equation scheme. Our results show that the ordered to random growth transition can be explained by including in the model bond breaking mechanisms due to finite Fe–Fe bond energy. A moderate interlayer diffusion has been inferred from data analysis between the second and the first layer, which has been used to estimate the energy barrier of the adatoms descending process.