High Pressure Torsion (HPT) experiments were performed for consolidation of water-atomized pure iron powder (99%) with initial particle sizes of 20-100 m. The experiments were carried out successfully at room temperature, achieving both low level of residual porosity and significant grain refinement, thanks to the intense shear strain and hydrostatic pressure applied in HPT. X-ray diffraction analysis was carried out on the consolidated samples which revealed no significant proportion of oxides. Considering the inherent heterogeneity of the imposed shear strain in HPT, different positions across the diameters of sample disks were selected for mechanical property and microstructure investigations. The effect of shear deformation on the microstructure and texture was investigated by metallography, scanning electron microscopy, electron backscattered diffraction (EBSD). The micro-hardness and porosity of the samples as a function of shear strain at constant hydrostatic pressure were also measured. The grain size distributions showed homogeneous microstructures with significant grain refinement due to shear deformation. The texture measurements revealed that a shear texture typical to the shear of bcc iron was obtained during HPT compaction of iron powder.