A novel iron-based micro-capsule catalyst with interior Fe/Silica core and exterior H-ZSM-5 shell was synthesized via in-situ crystallization route on Fe/SBA-15 catalyst by using steam-assisted crystallization (SAC) process and evaluated for direct synthesis of middle isoparaffin from syngas in a fixed-bed reactor. Structure characterization indicated that the size of micro-capsule catalyst was about 1-2 mu m. According to activity test results, original Fe/SBA-15 catalyst exhibited a low selectivity of isoparaffin as 8.2%. But the as-prepared micro-capsule catalyst achieved an excellent performance for isoparaffin synthesis with the selectivity up to 46.5%. Meanwhile, the physical mixture catalyst (Fe/SBA-15 and H-ZSM-5) exhibited lower isoparaffin selectivity with 33.9% than that of the micro-capsule catalyst. The spatial confinement effect of the micro-capsule catalyst played an important role for the high selectivity of isoparaffin synthesis. (C) 2014 Elsevier B.V. All rights reserved.