Developing an efficient material as a counter electrode (CE) with excellent catalytic activity, intrinsic stability, and low cost is essential for the commercial application of dye-sensitized solar cells (DSSCs). Transition metal phosphides have been demonstrated as outstanding multifunctional catalysts in a broad range of energy conversion technologies. Here, we exploited different phases of iron phosphide as CEs in DSSCs with an I–/I3–-based electrolyte. Solvothermal synthesis using a triphenylphosphine precursor as a phosphorus source allows to grow a Fe2P phase at 300 °C and a FeP phase at 350 °C. The obtained iron phosphide catalysts were coated on fluorine-doped tin oxide substrates and heat-treated at 450 °C under an inert gas atmosphere. The solar-to-current conversion efficiency of the solar cells assembled with the Fe2P material reached 3.96 ± 0.06%, which is comparable to the device assembled with a platinum (Pt) CE. DFT calculations support the experimental observations and explain the fundamental origin behind the improved performance of Fe2P compared to FeP. These results indicate that the Fe2P catalyst exhibits excellent performance along with desired stability to be deployed as an efficient Pt-free alternative in DSSCs.