Nitrogen functionalized carbon with embedded iron nanoparticles was developed by a simple one-pot hydrothermal synthesis process. Different nitrogen atom sources can obviously affect the morphologies, structures, and surface properties of the formed functionalized catalysts through a one-pot hydrothermal self-assembly process. Among these processes, the introduction of nitrogen atom from pyrrolidine can promote the improvement of CO2 hydrogenation activity while lowering the production of the undesired CO byproduct. Different from pyrrolidine introduction, although the addition of three other nitrogenous reagents (ethylenediamine, pyridine, and diethylformamide) changed the physicochemical properties of the catalysts, the catalytic performance was not improved significantly. The improved CO2 hydrogenation performance over these functionalized catalysts was found to be correlated with the specific surface areas, the carbonization degree of iron species precursor, the amount of defect sites, and the content of pyridine-like nitrogen structures, which are determined by the doping nitrogen atom types. Furthermore, the one-step utilization of nitrogenous reagent as carbon sources also, besides nitrogen source, did not show a benign performance for catalyzing CO2 hydrogenation, indicating the importance of the synergistic self-assembly process derived from the carbonization process of pyrrolidine and glucose.