Our study focuses on the structural evolution of MCM-41-supported iron oxide under the reducing environment of catalyst pretreatment and ethylbenzene dehydrogenation reaction. Powder X-ray diffraction (XRD) analysis showed that the iron oxide is well-dispersed on the surface of the support with no detectable diffraction peaks from iron oxide. X-ray absorption near edge structure (XANES) study indicates that iron oxide is being reduced during catalyst pretreatment under flowing helium from alpha-Fe2O3 at room temperature to Fe3O4 at 425 degrees C. At 500 degrees C, the oxide species is reduced even further. Curve-fitting analysis of the extended X-ray absorption fine structure (EXAFS) radial distribution function (RDF) profile of the catalyst pretreated at 500 degrees C can be done with a basic tetragonal gamma-Fe2O3 spinel structure. However, the cationic vacancies of the spinel on the octahedral position are almost filled with iron cations, indicating that the structure of the iron oxide species is approaching that of a ccp FeO, Stabilization of the FeO-like structure formed at 500 degrees C is probably through iron oxide-support interactions, especially via condensation of the oxide terminal hydroxyl groups with the silanols of MCM-41. This distorted form of iron oxide species is metastable and contains labile surface oxide anions, which are probably responsible for the high initial catalytic activity during ethylbenzene dehydrogenation reaction at 500 degrees C. In the presence of the reactant, however, the iron oxide is further reduced and metallic iron is formed during the reaction. The formation of metallic iron is probably through fragmentation of FeO particles, as shown by catalysis and EXAFS results. The reduction process contributes mainly to the deactivation of the catalyst.