The reaction of lithiated 2,5-dimethylazaferrocene 1 with diethyl chlorophosphate proceeds to give lateral and ring phosphonate products. The products 2 and 3 were characterized by spectroscopic (1H, 31P{1H} NMR, MS, IR) methods and 3 was treated with W(CO)5(thf) to form a crystalline W(CO)5-complex 4 which was characterized by single-crystal X-ray analysis. The new 2,5-dimethylazaferrocenyl phosphonates were transformed into the corresponding N-methyl iodide salts 5 and 6 in quantitative yields. Both salts are water soluble and stable compounds and an analysis of their cytotoxic and anti-proliferative activity was carried out. Compound 6 possesses anti-metabolic activity which exhibited some preference towards the cancerous HeLa cell line over the non-cancerous NIH 3T3 cell line. These new compounds are the first examples of azaferrrocene (i.e. non-ferrocene) derivatives featuring biologically important phosphonate groups. The preliminary studies into cytotoxic activity indicates that as with ferrocene, azaferrocene can also be regarded as a potential source for organometallic anticancer agents, featuring the iron centre in the +2 oxidation state rather than the often utilized ferrocenium +3 species.