Isobavachalcone (IBC) is a flavonoid component of the traditional Chinese medicine Psoraleae Fructus, with a range of pharmacological properties. However, IBC causes some hepatotoxicity, and the mechanism of toxicity is unclear. The purpose of this paper was to investigate the possible mechanism of toxicity of IBC on HepG2 cells and zebrafish embryos. The results showed that exposure to IBC increased zebrafish embryo mortality and decreased hatchability. Meanwhile, IBC induced liver injury and increased expression of ALT and AST activity. Further studies showed that IBC caused the increase of ROS and MDA the decrease of CAT, GSH, and GSH-Px; the increase of Fe2+ content; and the changes of ferroptosis related genes (acsl4, gpx4, and xct) and iron storage related genes (tf, fth, and fpn) in zebrafish embryos. Through in vitro verification, it was found that IBC also caused oxidative stress and increased Fe2+ content in HepG2 cells. IBC caused depolarization of mitochondrial membrane potential (MMP) and reduction of mitochondrial ATP, as well as altered expression of ACSl4, SLC7A11, GPX4, and FTH1 proteins. Treatment of HepG2 cells with ferrostatin-1 could reverse the effect of IBC. Targeting the System Xc--GSH-GPX4 pathway of ferroptosis and preventing oxidative stress damage might offer a theoretical foundation for practical therapy and prevention of IBC-induced hepatotoxicity.