The earliest known iron artefacts are nine small beads securely dated to circa 3200 BC, from two burials in Gerzeh, northern Egypt. We show that these beads were made from meteoritic iron, and shaped by careful hammering the metal into thin sheets before rolling them into tubes. The study demonstrates the ability of neutron and X-ray methods to determine the nature of the material even after complete corrosion of the iron metal. The iron beads were strung into a necklace together with other exotic minerals such as lapis lazuli, gold and carnelian, revealing the status of meteoritic iron as a special material on a par with precious metal and gem stones. The results confirm that already in the fourth millennium BC metalworkers had mastered the smithing of meteoritic iron, an iron–nickel alloy much harder and more brittle than the more commonly worked copper. This is of wider significance as it demonstrates that metalworkers had already nearly two millennia of experience to hot-work meteoritic iron when iron smelting was introduced. This knowledge was essential for the development of iron smelting, which produced metal in a solid state process and hence depended on this ability in order to replace copper and bronze as the main utilitarian metals.