Phase-stabilised ammonium nitrate (PSAN) and hydroxyl-terminated polybutadiene (HTPB) are the main ingredients of propellants used with success in some pyrotechnic igniter components of the VULCAIN liquid rocket engine for the ARIANE 5. Small amounts of selected additives play an important role in solving some of the problems presented by composite propellants that include ammonium nitrate (AN). Iron(III) oxide (Fe2O3), for example, can be used as a burning-rate modifier in PSAN/HTPB propellants and although its effect on the burning rate is well known, its mechanism of action is not well understood. Thermogravimetry (TG), differential thermogravimetry (DTG) and differential thermal analysis (DTA) have been applied to study the slow thermal decomposition of selected compositions to investigate the mechanism of action of Fe2O3 as a burning-rate modifier of PSAN/HTPB propellants. The compositions evaluated include PSAN, Fe2O3 and HTPB cross-linked with isophorone diisocyanate (IPDI) as ingredients. No effect of Fe2O3 on PSAN decomposition is found. Fe2O3 shows an effect on the kinetics of the first stage of HTPB-IPDI decomposition and increases the exothermicity of HTPB-IPDI decomposition. In the decomposition of PSAN/HTPB-IPDI/Fe2O3 propellants, the effect of Fe2O3 is also observed and a synergetic interaction between PSAN and HTPB-IPDI is found, for which a physical-chemical explanation is given.