Iron is more reactive than $\mathrm{Cu}$. So it displaces $\mathrm{Cu}$ from copper sulphate solution. Thus, blue colour of the $\mathrm{CuSO}_4$ solution fades and colour of the solution turns green due to the formation of ferrous sulphate solution. This is a displacement reaction. $\underset{\text{Blue}}{\mathrm{CuSO}_4(\mathrm{aq})} + \mathrm{Fe}(\mathrm{s}) \rightarrow \underset{\text{Green}}{\mathrm{FeSO}_4(\mathrm{aq})} + \mathrm{Cu}(\mathrm{s})$