This study investigates the complete removal of nitrate and the recovery of valuable ammonium salt by the combination of nanoscale zero-valent iron (NZVI) and a membrane contactor system. The NZVI used for the experiments was prepared by chemical reduction without a stabilizing agent. The main end-product of nitrate reduction by NZVI was ammonia, and the solution pH was stably maintained around 10.5. Effective removal of ammonia was possible with the polytetrafluoroethylene membrane contactor system in all tested conditions. Among the various operation parameters including influent pH, concentration, temperature, and contact time, contact time and solution pH showed significant effects on the ammonia removal mechanism. Also, the osmotic distillation phenomena that deteriorate the mass transfer efficiency could be minimized by pre-heating the influent wastewater. The ammonia removal rate could be maximized by optimizing operation conditions and changing the membrane configuration. The combination of NZVI and the membrane contactor system could be a solution for nitrate removal and the recovery of valuable products.