We report on the morphology, magnetic properties, and magnetoresistance (MR) of Fe thin films in the as-deposited state and after subsequent oxidation in water vapor or CO/CO2 atmospheres. The Fe layers were electrodeposited on hydrogen-terminated Si single-crystal substrates from aqueous electrolytes containing iron sulfate at pH 2.3. Granular Fe films with morphological characteristics dependent of the deposition potential showed coercive fields decreasing with increasing thickness. Negative MR was observed in both configurations of current parallel or perpendicular to an in-plane magnetic field. This indicates that the as-deposited granular films already contain an oxide barrier at the grain boundaries leading to an MR that overcomes the anisotropic parts of it. Oxidation in water vapor and CO/CO2 atmospheres resulted in samples with magnetoresistive effects in the range of 1.0-1.2%, about a factor of 4 higher than the values observed for the as-deposited Fe layers. The negative MR in both directions of the as-deposited and oxidized samples had in common the highest values at the coercive field, characteristic of systems with MR due to the field-induced alignment of adjacent grains.