SignificanceFeO is a compound of great interest in materials physics and geophysics. It has a complex pressure–temperature (P,T) phase diagram, including subtle structural and magnetic transitions. Currently, it is challenging for prevailing theoretical approaches for strongly correlated materials, such as FeO at lowP,Ts, to address anharmonic vibrations. We use density functional theory–based molecular dynamics and lattice dynamics calculations to demonstrate the dynamic and thermodynamic stability of an experimentally observed but theoretically unidentified B2-type phase of FeO at highP,Ts. We show that this phase is unstable at lowTs, but is stabilized at highP,Ts by anharmonic effects and thermal electronic excitations. This study establishes a theoretical framework for studying FeO and related Fe alloys at the Earth’s core conditions.