Heterogeneous iron catalysts are active in the hydrogenation of carbon oxides and are widely investigated for the production of long‐chained hydrocarbons according to the Fischer‐Tropsch synthesis. Moreover, high selectivity of light hydrocarbons, such as CH4, also occurs strongly depending on reaction conditions and catalyst formulations. As a consequence, Fe catalysts reveal promising methanation activity as referred to the traditional Ni catalysts. Additionally, Fe catalysts also benefit from their low price and toxicological harmlessness. However, the dynamic behavior of iron upon CO2 hydrogenation is not yet unraveled unambiguously including phase transformations, structural changes and participation of carbon species formed. The present review highlights these complex processes of Fe catalysts with special focus on the methanation of CO2. Additionally, different analytical tools useful for ex situ and in situ studies are critically evaluated.