Nitrogen incorporates into Fe thin films during reactively sputtered TiN capping layer deposition. The influence that this nitrogen incorporation has both on the structure and magnetic properties is discussed for a series of Fe~001! thin films grown at different temperatures. A higher nitrogen content is accompanied by distortion in the Fe lattice and by reduction in the Fe magnetization saturation as well as in the effective anisotropy constant, K. The reduction of K brings as a consequence lowering in the coercive field with respect to equivalent Fe films with no nitrogen present.