The laser action of an all gas-phase iodine laser (AGIL), which uses molecular iodine as a source of iodine atoms, has been demonstrated. The laser is based on the energy transfer reaction between metastable NCl(a ¹Δ) and ground state I(²P_3/2) atoms, which are produced by the electric discharge of a mixture of I₂ and He. At fixed flow rates of the chemical species, the laser output powers are measured at three different positions in a flow reactor. The output power is characterized by a function of the optical axis position and is in reasonable agreement with the numerical simulation. A repetitive pulse of laser output at 50 Hz with a duty factor of 40% is observed. The highest output power is 40 mW at 210 mm downstream from the mixing point of I/H/He and NCl₃. This is 80% of the output power generated from the conventional system using HI as an iodine donor. The measured results of the time-resolved laser output power suggest that the output power of the I₂-AGIL is more sensitive to the electric discharge plasma intensity as compared with that of the HI-AGIL. An AGIL operated using I₂ could potentially have the same output power as that of an AGIL operated using HI if a continuous-wave electric discharge generator is used.