The two 155-pound fighters have gone back and forth on social media for weeks, and will now meet in the main event of the UFC's first trip to Lincoln's Pinnacle Bank Arena.
Gaethje (18-2) won the first 18 fights of his professional career, but is 0-2 in his past two appearances.
Fighting out of Denver, Gaethje suffered a third-round knockout loss to Eddie Alvarez at UFC 218 in December, in a 2017 Fight of the Year candidate. He followed that with a TKO loss to Dustin Poirier in April.
The former WSOF champion is still considered one of the best lightweights in the world, despite the recent skid.
Iaquinta (13-4-1), of Long Island, is coming off an unexpected UFC title shot in April. The 31-year-old stepped up to fight Khabib Nurmagomedov at UFC 223, after Tony Ferguson and Max Holloway fell off the card for various reasons. Iaquinta lost via unanimous decision.