Nanoscale zero-valent iron (nZVI) is an effective arsenic (As) scavenger. However, spent nZVI may pose a higher environmental risk than our initial thought in the presence of As-reducing bacteria. Therefore, our motivation was to explore the As redox transformation and release in spent nZVI waste residue in contact with Pantoea sp. IMH, an arsC gene container. Our incubation results showed that IMH preferentially reduce soluble As(V), not solid-bound As(V), and was innocent in elevating total dissolved As concentrations. μ-XRF and As μ-XANES spectra clearly revealed the heterogeneity and complexity of the inoculated and control samples. Nevertheless, the surface As local coordination was not affected by the presence of IMH as evidenced by similar As-Fe atomic distance (3.32–3.36 Å) and coordination number (1.9) in control and inoculated samples. The Fe XANES results suggested that magnetite in nZVI residue was partly transformed to ferrihydrite, and IMH slowed down the nZVI aging process. IMH distorted Fe local coordination without change its As adsorption capacity as suggested by Mossbauer spectroscopy. Arsenic retention is not inevitably enhanced by in situ formed secondary Fe minerals, but depends on the relative As affinity between the primary and secondary iron minerals.