Exsolution generates stable and catalytically active metal nanoparticles via phase precipitation out of a host oxide. An ability to control the size and dispersion of the exsolution particles is desirable for design of nanostructured (electro)catalysts. Here, we demonstrate that tuning point defects by lattice strain affects both the thermodynamics and the kinetics of iron (Fe0) exsolution on La0.6Sr0.4FeO3 (LSF) thin film model. By combining in situ surface characterization and ab initio defect modeling, we show oxygen vacancy and Schottky defects to be the primary point defects formed upon Fe0 exsolution. Lattice strain tunes the formation energy, and thus the abundance of these defects, and alters the amount and size of the resulting exsolution particles. In addition, we find that the density of exsolved nanoparticles matches the concentration of oxygen vacancy pairs, thus pointing to the surface oxygen vacancy pairs as preferential nucleation sites for exsolution. The tensile-strained LSF with a facile formation of these critical point defects results in a higher Fe0 metal concentration, a larger density of nanoparticles, and a reduced particle size at its surfaces. These results provide important mechanistic insights and highlight the role of point-defect engineering in designing nanostructured catalysts in energy and fuel conversion technologies.