Step-induced anisotropy of electron transport in ultrathin Fe film was investigated. The Fe films ͑2 and 10 nm͒ were deposited on vicinal MgO ͑100͒ substrate using molecular-beam epitaxy. It is found that the films with a thickness of 10 and 2 nm are continuous and discontinuous, respectively, which was determined from their resistivity values, the temperature dependency of the resistivity and the V-I curve. The enhanced magnetoresistance in the continuous and the discontinuous films was observed when the current flows parallel and perpendicular to the miscut direction, respectively. We suggest that the atomic steps in the continuous films nucleate additional domain walls acting as scattering centers and the extra scattering was introduced for the current perpendicular to the step edges. The mechanism of the influence of the atomic steps on the electron-transport properties is different in the continuous and discontinuous films. We further suggest that in the discontinuous films, the atomic steps result in the anisotropic growth of the islands and the anisotropy in the transport behavior as a consequence.