A series of iron-containing catalysts with 2.5 mass% Fe (A), 5.5-8.0mass% Fe(B), 5.5-8.Omass% Fe + 0.2 mass% Zr(B-Zn), and 15.0-20.0 mass% Fe (C) was obtained from gels produced by alkoxy synthesis and treated either under H-2 (400-degrees-C) or successively in air (500-degrees-C) and under H-2 (400-degrees-C). The catalysts were tested in CO hydrogenation (T = 350-degrees-C, P = 18 MPa, CO/H-2 = 1) and studied by in situ Mossbauer spectroscopic and magnetic susceptibility measurements. Depending on the Fe loading and activation procedure, the catalysts showed more or less selectivity, S, in C1-C3-Ph and C4-C8-Ph production. Catalysts A and B, treated by H-2, yielded C1-C3-Ph with S almost-equal-to 48% and traces Of C4-C8-Ph. When successively treated with 02 and H-2, catalysts A and B markedly lost C1-C3-Ph selectivity (S almost-equal-to 30%) with increasing S(C4-C8-Ph) to almost-equal-to 8-9%. Catalyst B-Zr showed the highest selectivity (S(C1-C3-Ph), almost-equal-to 52%, even after two-step activation. Independent of the activation procedure, catalyst C showed no selectivity at all. The formation of small (d almost-equal-to 3 nm) carbide clusters Fe(x)C and chi-Fe5C2 was shown to be a crucial point for process selectivity. No metallic iron phase was observed in selective catalysts. The most selective B-Zr catalyst revealed small amounts of FexC carbide along with high-spin Fe3+ and Fe2+ in a gamma-Al2-x-yFexZryO3 matrix. The presence of Zr causes a stabilization effect, inhibiting the loss of lattice oxygen and favoring the reaction of active carbon (C(i)) with iron intermediates. The participation of anion vacancies and "oxidic" carbon in selective catalysis is discussed.