Functional oxides whose physicochemical properties may be reversibly changed at standard conditions are potential candidates for the use in next-generation nanoelectronic devices. To date, vanadium dioxide (VO2) is the only known simple transition-metal oxide that demonstrates a near-roomtemperature metal–insulator transition that may be used in such appliances. In this work, we synthesized and investigated the crystals of a novel mixed-valent iron oxide with an unconventional Fe5O6 stoichiometry. Near 275 K, Fe5O6 undergoes a Verwey-type charge-ordering transition that is concurrent with a dimerization in the iron chains and a following formation of new Fe−Fe chemical bonds. This unique feature highlights Fe5O6 as a promising candidate for the use in innovative applications.We established that the minimal Fe−Fe distance in the octahedral chains is a key parameter that determines the type and temperature of charge ordering. This model provides new insights into charge-ordering phenomena in transition-metal oxides in general.