Iron supported bentonite clay catalysts have been prepared by the ion exchange of bentonite with iron(2+) and iron(3+) solution and immobilization with iron compounds using ligands: acetylacetonate, picolinate, pyrazinate and bipyridine. The catalysts were characterized by FT-IR spectroscopy, X-ray diffraction, X-ray fluorescence analysis and scanning electron microscopy. They were used as catalyst in the oxidation reaction of cyclooctane with tert-butyl hydroperoxide as oxidant. The experimental results show that activity of the catalysts is influenced by ligand, it decreases in the following order: acetylacetonate > picolinate > pyrazinate similar to bipyridine. Bentonite supported with iron(3+) acetylacetonate gave 17% yield with 80% selectivity to cyclooctanone at 70 degrees C for 24 h. The mechanism of the cyclooctane oxidation with tert-butyl hydroperoxide was proposed to occur via alkyl hydroperoxide intermediate in radical pathway. (c) 2006 Springer Science + Business Media, Inc.