Insight into the detailed mechanism of the Sabatier reaction on iron is essential for the design of cheap, environmentally benign, efficient and selective catalytic surfaces for CO 2 reduction. Earlier attempts to unravel the mechanism of CO 2 reduction on pure metals including inexpensive metals focused on Ni and Cu; however, the detailed mechanism of CO 2 reduction on iron is not yet known. We have, thus, explored with spin-polarized density functional theory calculations the relative stabilities of intermediates and kinetic barriers associated with methanation of CO 2 via the CO and non-CO pathways on the Fe (111) surface. Through the non-CO (formate) pathway, a dihydride CO 2 species (H 2 CO 2), which decomposes to aldehyde (CHO), is further hydrogenated into methoxy, methanol and then methane. Through the CO pathway, it is observed that the CO species formed from dihydroxycarbene is not favorably decomposed into carbide (both thermodynamically and kinetically challenging) but CO undergoes associative hydrogenation to form CH 2 OH which decomposes into CH 2 , leading to methane formation. Our results show that the transformation of CO 2 to methane proceeds via the CO pathway, since the barriers leading to alkoxy transformation into methane are high via the non-CO pathway. Methanol formation is more favored via the non-CO pathway. Iron (111) shows selectivity towards CO methanation over CO 2 methanation due to differences in the rate-determining steps, i.e., 91.6 kJ mol −1 and 146.2 kJ mol −1 , respectively. Keywords Spin-polarized DFT-GGA • CO 2 methanation • CO methanation • Methanol formation • Reaction mechanism CO 2 + 4 H 2 → CH 4 + 2 H 2 O ΔH 298K = −252.9 kJ mol −1 .