Density functional theory calculations have been carried out on the reaction of ketene hydrogenation on Fe5C2(0 0 1) for the understanding of the Fischer-Tropsch synthesis mechanism. The main reaction pathway of ethene formation is CsH2CO -> CCsH2 -> CHCsH2 -> CH2CsH2, and ethane formation follows CsH2CO -> CCsH2 -> CCsH3 -> CCsH3 -> CHCsH3 -> CH2CsH3 -> CH3CsH3, while that of ethanol is CsH2CO -> [CsH3CO and/or CsH2CHO] -> CsH3CHO -> CsH3CH2O -> CsH3CH2OH. Detailed comparison shows clearly that ketene dissociation with the formation of hydrocarbons is more favorable than the stepwise hydrogenation with the formation of ethanol. The expected product should be hydrocarbons rather than ethanol, in agreement with the experimental observation. (C) 2007 Elsevier B.V. All rights reserved.