The increasing global population and declining freshwater availability have intensified the need for sustainable water treatment solutions, particularly in arid and semiarid regions. Solar desalination ponds offer a cost-effective and environmentally friendly alternative for freshwater production; however, their efficiency remains limited by conventional materials and designs, such as the use of steel plates for the pond base and standard insulation without advanced thermal enhancement features. This study presents a comparative laboratory and theoretical investigation of two solar desalination ponds: a conventional system using steel plates and an Fe2O3-enhanced configuration. The modified pond demonstrated a significant improvement in thermal behavior, freshwater yield, and energy utilization. Specifically, the modified system produced up to 60% more freshwater than the conventional unit during peak summer conditions, with an average annual productivity increase of 21%. Furthermore, the highest energy and exergy efficiencies were observed in July, whereas the lowest occurred in January, underscoring the seasonal performance dynamics. Exergy efficiency consistently trailed energy efficiency by approximately 39%, highlighting system irreversibilities. This study introduces a scalable, low-cost material innovation that leverages the thermal and optical advantages of nano-ferric oxide to substantially improve desalination performance under real-world climatic conditions.