The formation, growth, and dissolution of the passive film on iron in neutral and alkaline solutions was investigated using a light reflectance technique. It was found that depending on the hydrodynamic conditions the formation of a hydroxide layer can take place during passivation. The strong influence of the hydrodynamic conditions can explain many contradictory results in the literature concerning the presence of a hydroxide layer on the protecting oxide film. Furthermore, the hydroxide layer affects capacitance and photocurrent measurements which are frequently used to obtain information about the semiconducting properties of the passive film on iron. In photoelectrochemical experiments the incoming photon flux is attenuated by the hydroxide layer which results in a decrease of photocurrent intensity. In ac-impedance measurements the potential dependence of the capacitance is qualitatively not affected; but a significantly increased frequency dispersion of the results is observed.