In search for dilute magnetic semiconductors, the magnetic properties at the atomic‐scale of Fe atoms incorporated in ZnO, in a concentration range of more than five orders of magnitude from 1 × 10−5 to 2.2 at% have been probed using emission 57Fe Mössbauer spectroscopy on implanted 57Mn and 57Co produced at ISOLDE/CERN. In the ultra‐dilute regime (10−5 at%), the system shows isolated paramagnetic Fe3+ ions with a spin–lattice type of relaxation. At higher concentrations (between 0.02 and 0.2 at%) a transition to spin–spin type of relaxation between neighboring Fe3+ is observed, without any signature of magnetic ordering up to 2.2 at%. Despite the many reports of dilute magnetism in 3d‐doped ZnO, this atomic level study shows no evidence of any long‐range magnetic ordering between isolated Fe atoms incorporated in the ZnO lattice.