Labile Fe²⁺ has been considered to be a metabolically active and regulatory form of cellular iron. Monitoring the dynamic level of labile Fe²⁺ in biological systems is vital for evaluating the iron related biological processes and diseases as well as dissecting the exact physiological and pathophysiological functions of the labile Fe²⁺. Herein, we rationally constructed a coumarin-based fluorescent probe for sensing labile Fe²⁺ in living systems based on a novel Fe²⁺ meditated cyclization reaction strategy. The probe showed a highly selective and sensitive response to Fe²⁺, and the detection limit was determined to be 45 nM. Significantly, the probe displayed fast response to Fe²⁺, with the sensing reaction completed in 2 min, which is beneficial for real time sensing. The application of the probe for sensing different concentrations of labile Fe²⁺ in living cells has been conducted. In addition, the basal and endogenous levels of labile Fe²⁺ in living systems were also successfully monitored.