Yes, rusting of iron is a chemical reaction. When iron rusts, it reacts with oxygen present in water or moisture in the air to create a new compound called hydrated iron (lll) oxide.
Fe(s) + O2(g) 🡪 Fe2O3.xH2O(s)
Fe2O3.xH2O is commonly known as rust and has properties entirely different from that of iron or oxygen.