Methane activation at moderate conditions and with good selectivity for value-added chemicals still remains a huge challenge. Here, we present a highly selective catalyst for the transformation of methane to methanol composed of highly dispersed iron species on TiO2. The catalyst operates under moderate light irradiation (close to one sun) and at ambient conditions. The optimised sample shows a 15% conversion rate for CH4 with an alcohol selectivity of over 97% (methanol selectivity over 90%) and a yield of 18 moles of alcohol per mole of iron active site in just three hours. XPS measurements with and without Xenon lamp irradiation, light intensity-modulated spectroscopies, photoelectrochemical measurements, XANES and EXAFS spectra, as well as isotopic analysis confirm the function of the major ironcontaining species, namely FeOOH and Fe2O3, which enhance charge transfer and separation, decrease the overpotential of the reduction reaction and improves selectivity towards methanol over CO2 production.