Hard-scatter processes in hadronic collisions are often significantly contaminated by background contributions from pileup in proton-proton collisions or underlying event in heavy-ion collisions. This background has a significant impact on jet reconstruction and on the ability to identify the substructures of hadronically decaying boosted objects. We present a new background subtraction method for jet and event observables which is based on the Constituent Subtraction algorithm. The new subtraction method, called Iterative Constituent Subtraction, adopts an iterative approach to the event-wide implementation of Constituent Subtraction. Using particle-level simulation, we provide a comparison of Iterative Constituent Subtraction with several existing methods. Possibilities to use information from charged particles to correct neutral particles are also discussed.