<p>A novel squaraine dye, 6-carboxy-2-[[3-[1,3-dihydro-3,3-dimethy-1-ethyl-2<i>H</i>-indol-2-ylidene)methyl]-2-hydroxy-4-oxo-2-cyclobuten-1-ylidene]methyl]-3,3-trimethy-3<i>H</i>-indolium, has been synthesized. The squaraine dye was found to be a dual colorimetric and fluorescent probe for the determination of iron (III) in CH<sub>3</sub>CH<sub>2</sub>OH/H<sub>2</sub>O (4:1, v/v) exhibiting high selectivity and sensitivity. The binding of squaraine dye +Fe<sup>3+</sup> was studied by a Job’s plot and Fourier transform infrared and <sup>1</sup>H nuclear magnetic resonance spectroscopies. The result indicates that the squaraine dye may be utilized as a naked-eye and real-time probe for the efficient determination of Fe<sup>3+.</sup></p