The reduction behaviour (the activation process) of two iron-based Fischer-Tropsch catalysts viz. an unpromoted and a potassium-promoted zirconia-supported iron catalyst is investigated. The initial dispersion of both catalysts is very high. To establish the nature of the iron species under hydrogen atmosphere, experiments were performed at ambient pressure. It is demonstrated for both catalysts that during reduction the carbon originating from the citrate complex used in the preparation procedure is not completely removed, whereby the largest amount of the carbon species is encountered on the potassium-promoted catalyst. During reduction at ambient pressure this residual carbon reacts with metallic iron and forms cementite (theta-Fe3C). The iron oxide of the potassium-promoted catalyst turns out to reduce more easily than the oxide of the unpromoted catalyst. Upon formation of divalent iron, this divalent species readily reacts with the support to give a stable mixed oxide. This mixed oxide is suggested to be a prerequisite in maintaining a high dispersion of the metallic iron particles. Based on the analyses presented here, a reduction model is proposed.