We prove the hitherto hypothesized sequential dissociation of Fe(CO)(5) in the gas phase upon photoexcitation at 266 nm via a singlet pathway with time-resolved valence and core-level photoelectron spectroscopy with an x-ray free-electron laser. Valence photoelectron spectra are used to identify free CO molecules and to determine the time constants of stepwise dissociation to Fe(CO)(4) within the temporal resolution of the experiment and further to Fe(CO)(3) within 3 ps. Fe 3p core-level photoelectron spectra directly reflect the singlet spin state of the Fe center in Fe(CO)(5), Fe(CO)(4), and Fe(CO)(3) showing that the dissociation exclusively occurs along a singlet pathway without triplet-state contribution. Our results are important for assessing intra- and intermolecular relaxation processes in the photodissociation dynamics of the prototypical Fe(CO)(5) complex in the gas phase and in solution, and they establish time-resolved core-level photoelectron spectroscopy as a powerful tool for determining the multiplicity of transition metals in photochemical reactions of coordination complexes.