<p>Gradient nano-grained structures have attracted significant attention due to their superior strength–ductility synergy. However, the hydrogen embrittlement (HE) mechanism induced by hydrogen segregation at grain boundaries (GBs) remains unclear in gradient polycrystalline iron. In this work, molecular dynamics (MD) simulations were employed to systematically investigate the hydrogen diffusion behavior, mechanical response, deformation mechanisms, and hydrogen-induced crack evolution in gradient nano-grained body-centered cubic (BCC) iron with varying gradient levels under different hydrogen concentrations (0%, 0.5%, and 1.5%). The results show that the hydrogen diffusion coefficient increases with both the average grain size and hydrogen concentration, with a more pronounced enhancing effect of hydrogen concentration observed in models with larger grains. Hydrogen does not alter the fundamental plastic deformation mechanisms in gradient nano-grained iron but elevates the peak stress by pinning GB dislocations. In the coarse-grained gradient model (GNG4), intergranular fracture results from the synergy of the hydrogen-enhanced decohesion (HEDE) and the reduction in GB dislocation density induced by hydrogen. In the ultrafine-grained gradient model (GNG1), the influence of hydrogen on crack nucleation results from the competition among dislocation pileup, GB accommodation, and hydrogen-induced weakening. This study reveals a size-dependent competitive mechanism governing hydrogen-induced crack nucleation in gradient nano-grained iron, providing an atomic-scale theoretical basis for optimizing the design of gradient-structured materials with enhanced resistance to hydrogen damage.</p>