Alluaudite sodium iron sulfate NaFe(SO$4$)$3$ is one of the most promising candidates for a Na-ion battery cathode material with earth-abundant elements; it exhibits the highest potential among any Fe$\mathrm{<mrow\; data-mjx-texclass="ORD">3+</mrow>}$/Fe$\mathrm{<mrow\; data-mjx-texclass="ORD">2+</mrow>}$ redox reactions (3.8 V vs Na/Na$+$ ), good cycle performance, and high rate capability. However, the reaction mechanism during electrochemical charging/discharging processes is still not understood. Here, we surveyed the intercalation mechanism via synchrotron X-ray diffraction (XRD), $\mathrm{<mrow\; data-mjx-texclass="ORD">23</mrow>}$Na nuclear magnetic resonance (NMR), density functional theory (DFT) calculations, X-ray absorption near edge structure (XANES), and Mössbauer spectroscopy. Throughout charging/discharging processes, the structure undergoes a reversible, single-phase (solid solution) reaction based on a Fe$\mathrm{<mrow\; data-mjx-texclass="ORD">3+</mrow>}$/Fe$\mathrm{<mrow\; data-mjx-texclass="ORD">2+</mrow>}$ redox reaction with a small volume change of ca. 3.5% after an initial structural rearrangement upon the first charging process, where a small amount of Fe irreversibly migrates from the original site to a Na site. Sodium extraction occurs in a sequential manner at various Na sites in the structure at their specific voltage regions.