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Tar removal catalyst development is the main hurdle to improving the process of steam biomass gasification in a fluidized bed. A Ni/olivine catalyst has been previously developed to enhance the catalytic properties of calcined natural olivine and showed excellent performance and stability during biomass steam gasification in the fast internally circulating fluidized bed (FICFB) gasifier. However, the origin of its active phase was not well-understood. The present work explains the mechanism of formation and the nature of the active phase of the Ni/olivine catalyst, characterized before testing, after calcination, and after reduction by means of X-ray diffraction (XRD), scanning electron microscopy (SEM), temperature-programmed reduction (TPR), and 57Fe Mössbauer spectroscopy. Two phenomena contribute to the formation of this active system:  the formation of a NiO−MgO solid solution on the olivine surface during calcination and Ni−Fe alloys during the reduction, both of which are known to have beneficial effects on increasing carbon deposition resistance. The catalyst, resulting from subsequent calcination and reduction of the precursor after the impregnation of natural olivine with nickel nitrate, can be described as a Ni−Fe/MgO/olivine system. Its catalytic performances are confirmed in the steam reforming of methane and toluene as a tar model compound.