The invention relates to a beneficiation method for iron increase and impurity reduction of low-grade iron ore powder. The method comprises the following steps that firstly, water is added into iron ore powder to be subjected to stirring and slurry mixing, suspension ore slurry is achieved, and flowing is facilitated; secondly, a hydrocyclone is adopted for carrying out grading and concentrating in advance, sand setting is carried out for ore grinding, overflowing is carried out, and the sorting procedure is executed; thirdly, the hydrocyclone carries out overflow to carry out weak magnetic roughing, weak magnetic selection and weak magnetic scavenging, and high-grade weak magnetic concentrates are obtained; fourthly, weak magnetic scavenging tailings are subjected to screening and slag separating, and impurities are removed; fifthly, minus sieve ore slurry after slag separating is subjected to strong magnetic roughing and strong magnetic scavenging, and a strong magnetic separation concentrate is obtained; sixthly, the strong magnetic separation concentrate is subjected to grading and concentrating through the hydrocyclone, sand setting is carried out for ore grinding, overflowingis carried out, and the sorting procedure is executed; and seventhly, hydrocyclone carries out overflow, a spiral chute is adopted for roughing and selection, and the spiral chute concentrate can beobtained.