The transformation of ethanol on Fe ion-exchanged mordenite was compared in the temperature range of 200-400degreesC for samples prepared in the solution and solid states. Ethane and methane were found as rather major products, compared to acetaldehyde and acetone. Diethyl ether was also detected as a dehydration product. The conversion was found to increase monotonically (to 96%) with increasing the Fe content (to 100%) and reaction temperature to 400degreesC. The selectivity towards acetaldehyde and acetone was found maximum at the temperature 300degreesC. Decrease in the catalyst Bronsted acidity due to ion-exchange in solution caused a marked increase in the selectivity toward acetaldehyde at 300degreesC. At variance, Fe ion-exchanged in the solid state resulted in a higher Bronsted acidity catalyst of higher selectivity to acetone. The solid state exchanged catalyst formed more coke at 400degreesC. The higher zeolite acidity catalyzes the ethane propagation into the coke precursors. The extraordinary formation of ethane as a dominant transformation product (in the absence of H-2 gas supply) is explained mainly to the O-abstracting affinity of the Fe3+ ion. Methane may be formed as a result of decomposition reaction at high temperatures. Mossbauer and XRD were applied for characterizing different Fe species involved as active sites in the reaction. Coke deposited on the catalysts was measured by TGA. Other helpful information was obtained from BET of N-2-adsorption and FT-IR of NH3-adsorption. Fair correlation between the active sites responsible for formation of the various products and the zeolite acidity is discussed along with a possible role for the surface area and pore structure in the reaction activity and selectivity. (C) 2003 Elsevier Science B.V. All rights reserved.