Adsorption of NO on Fe-ZSM-5 leads to formation of Fen+-NO (n = 2 or 3) species (1880 cm(-1)), Fe2+(NO)(2) complexes (1920 and 1835 cm(-1)) and NO+ (2133 cm(-1)). Water strongly suppresses the formation of NO+ and Fen+(NO)(2) and more slightly the formation of Fen+-NO. Introduction of oxygen to NO converts the nitrosyls into surface nitrates (1620 and 1575 cm(-1)) and this process is almost unaffected by water. The nitrates are thermally stable up to ca. 300 degrees C, but readily interact with propane at 200 degrees C, thus forming surface C-H-N-O deposit (bands in the 1700-1300 cm(-1) region). Here again, water does not hinder the process. The C-H-N-O deposit is relatively inert (it does not interact with NO or NO +O-2 at ambient temperature) but, at temperatures higher than 250 degrees C, it is decomposed to NCO- species (bands at 2215 (Fe-NCO) and 2256 cm(-1) (Al-NCO)). In the presence of water, however, the Fe-NCO species only are formed. At ambient temperature the NCO- species are inert towards NO and O-2, but easily react with a NO +O-2 mixture. The mechanism of the selective catalytic reduction of nitrogen oxides on Fe-ZSM-5 and the effect of water on the process are discussed.