Iron‐impregnated medium pore zeolite ZSM‐5 (pore opening of 5.5 A˚) is an efficient catalyst for the conversion of synthesis gas (CO+H2) to high octane gasoline. Activity and selectivity of the ZSM‐5 (Fe) depends upon the manner in which Fe is impregnated on ZSM‐5. Magnetic and Mo¨ssbauer studies were conducted on catalysts prepared by two methods: (a) ferric nitrate impregnation and (b) carbonyl Fe3(CO)12impregnation on the zeolite. These studies were conducted for various stages of preparation and after use of the catalysts. The carbonyl impregnated sample in the as‐prepared form contained ultrafine &ggr;‐Fe2O3of d = 60–66 A˚, as evidenced by superparamagnetic behavior seen in magnetic and Mo¨ssbauer studies. In contrast, the as‐prepared, nitrate impregnated sample showed &agr;‐Fe2O3of approximate particle size of 100 A˚. Both samples were reduced to about 80% metallic Fe in flowing H2. On exposure to synthesis gas, the carbonyl impregnated sample yielded a substantial amount of Fe3O4in addition to &khgr; carbide, wheres the nitrate impregnated sample exhibited &egr;, &khgr;, and &Vthgr; carbides. The steady catalytic activity and selectivity of the carbonyl impregnated sample can be related to the ultrafine iron dispersions leading to the observed phases in the used catalyst.