A new method for quenching kinetic discrimination of Fe2+ and Fe3+, and sensitive detection of trace amount of Fe2+ was developed by using synchronous fluorescence scan technique. The principle of this assay is based on the quenching kinetic discrimination of Fe2+ and Fe3+ in CePO4:Tb3+ nanocrytals–H2O2 hybrid system and the Fenton reaction between Fe2+ and H2O2. Stable, water-soluble and well-dispersible CePO4:Tb3+ nanocrystals were synthesized in aqueous solutions, and characterized by transmission electron microscopy (TEM) and electron diffraction spectroscopy (EDS). We found that both Fe2+ and Fe3+ could quench the synchronous fluorescence of CePO4:Tb3+ nanocrytals-H2O2 system, but their quenching kinetics velocities were quite different. In the presence of Fe3+, the synchronous fluorescent intensity was unchanged after only one minute, but in the presence of Fe2+, the synchronous fluorescent intensity decreased slowly until 28 min later. The Fenton reaction between Fe2+ and H2O2 resulted in hydroxyl radicals which effectively quenched the synchronous fluorescence of the CePO4:Tb3+ nanocrystals due to the oxidation of Ce3+ into Ce4+ by hydroxyl radicals. Under optimum conditions, the linear range for Fe2+ is 3 nM–2 μM, and the limit of detection is 2.0 nM. The method was used to analyze water samples.