Fe2O3/ZrO2 catalysts prepared by impregnation and coprecipitation methods were used for catalytic hydrogenation of CO. It was shown that the structure, reduction behavior of iron species, and catalytic properties of the catalysts were obviously affected by the preparation methods. For the Fe2O3/ZrO2 catalyst prepared by the impregnation method, the Fischer-Tropsch catalytic activity and the selectivity to light olefins were much higher than those of the corresponding catalyst prepared by the coprecipitation method, the formation of methane was suppressed and the selectivity to light olefins was enhanced. Various intermediates formed during the successive steps of reduction of the catalysts were studied by using temperature-programmed reduction combined with in situ Mossbauer spectroscopy. The role of zirconia in the catalysts was discussed.