The catalytic growth of single- and double-walled carbon nanotubes (SWNTs and DWNTs) by chemical vapor deposition (CVD) strongly depends on the support material. Not only the presence of nanopores in the support material but also the interaction with metal particles is believed to play an important role. Here, we study the roles of the metal-support interaction by employing iron particles with a mean diameter of 9.8 nm supported on crystalline magnesia (MgO) powder. The crystalline MgO powder has a flat surface with few nanopores so that the change of the metal particle size and the growth of nanotubes can be observed with a transmission electron microscope. We found that the original iron particles became smaller during CVD and that these small particles gave SWNTs and DWNTs when reacted with methane. The decrease in the iron particle size is likely due to thermal diffusion of iron atoms into the MgO matrix, representing strong interaction between the iron particles and the MgO support. Reduction of the catalyst under a hydrogen flow at high temperature was found to suppress nanotube growth due to the increase in the particle size. The present results provide valuable information on the nanotube growth mechanism and could be applied to the diameter-controlled or large-scale synthesis of nanotubes on support materials.