The primary difference between iron and steel is that iron is a chemical element, while steel is an alloy mainly composed of iron and carbon. Iron in its pure form is soft and prone to rusting, whereas steel, with a small amount of carbon added, is harder, stronger, and less likely to rust. The addition of carbon and other alloying elements to iron during the steel-making process significantly enhances its mechanical properties, making steel more durable and versatile for a wide range of applications.