We report a comprehensive investigation of the structural, magnetic, vibrational, and optical properties of Fe-doped CrCl₃ under varying external pressures. By integrating high-pressure experimental techniques, including Raman spectroscopy, photoluminescence (PL), magnetization, and thermal expansion measurements, with density functional theory (DFT) calculations, we uncover pressure-driven phase and magnetic transitions in this layered van der Waals material. At ambient pressure, Raman spectra exhibit all six expected Raman-active modes, which systematically blueshift with increasing pressure. A distinct change occurs in A³_g mode near 9.2 GPa, suggesting an isostructural phase transition (IST), similar to that observed in pristine CrCl₃ around 11 GPa. PL measurements indicate a band gap of 1.48 eV at approximately 0.6 GPa, which increases with pressure up to 9.2 GPa, followed by a slight decrease beyond this point. This further confirms the occurrence of the IST. Magnetization measurements at ambient pressure under 0.001 T magnetic field reveal two magnetic transitions: T_N at 14.3 K and T_C at 16 K, indicating the coexistence of antiferromagnetic (AFM) and ferromagnetic (FM) phases. Upon applying pressure, T_N and T_C gradually become suppressed, and T_N disappears by 2 GPa. The transition width associated with T_C broadens beyond 0.5 GPa, highlighting the pressure-enhanced FM behavior. Field-dependent magnetization at ambient pressure shows complete suppression of T_N above 0.4 T, with FM ordering dominating at higher fields. At 1.2 GPa, both T_N and T_C shift to lower temperatures. Notably, T_N is suppressed above 0.2 T and only FM order remains. Grüneisen analysis of the uniaxial thermal expansion confirms the competition between FM and AFM interactions and yields very large uniaxial pressure effects of −143%/GPa and +43%/GPa, at T_N and T_C, respectively. DFT calculations for pure CrCl₃ are consistent with experimental data and predict a pressure-induced suppression of interlayer AFM exchange, accompanied by the stabilization of FMintralayer coupling through enhanced Cr–Cl–Cr superexchange pathways. These calculations suggest an AFM-to-FM interlayer stacking transition occurring near 1 GPa. Furthermore, increasing Fe doping appears to support the persistence of AFM character. Our findings establish Fe-doped CrCl₃ as a promising platform for pressure-tunable magnetism. The ability to manipulate FM and AFM interactions through external pressure and magnetic fields opens avenues for applications in sensors, spintronic devices, and other functional two-dimensional magnetic systems.