We report the tuning of the redox properties of iron and iron oxide nanoparticles by encapsulation within carbon nanotubes (CNTs) with varying inner diameters. Raman spectroscopy was employed to investigate the interaction of the encapsulated nanoparticles with the CNTs. A red shift of the Fe-O mode is observed in the nanoparticles deposited on the outer CNT surfaces with respect to bulk Fe2O3. However, this mode is found to be stepwise blue-shifted with decreasing inner diameter in the CNT-encapsulated Fe2O3 nanoparticles, suggesting an enhanced interaction of Fe2O3 with the inner CNT surface as its curvature increases. The autoreduction of the encapsulated Fe2O3 is significantly facilitated inside CNTs with respect to the outside nanoparticles. Interestingly, it becomes more facile with decreasing CNT channel diameter as evidenced by temperature programmed reaction, in situ XRD, and Raman spectroscopy. The oxidation of encapsulated metallic Fe nanoparticles on the other hand is retarded in comparison to that of the outside Fe particles as shown by in situ XRD and gravimetrical measurements with an online microbalance. We attribute this tunable redox behavior of transition metal nanoparticles inside CNTs to a particular electronic interaction of the encapsulates with the interior CNT surface, which stabilizes the metallic state of Fe.