Physicochemical characteristics of isomorphously substituted FeZSM-5 both after preparation and after activation have been determined by gas (Ar and N-2) physisorption, Al-27 and Si-29 magic-angle spinning-nuclear magnetic resonance, NH3 temperature-programmed desorption, transmission electron microscopy, H-2 temperature-programmed reduction (TPR), Fe-57 Mossbauer spectroscopy, and voltammetric response techniques. The activation of as-synthesized FeZSM-5 comprises calcination at 823 K and a subsequent steam treatment (300 mbar of H2O in N-2) at 873 K. Calcination leads to complete removal of the template. During this process a significant fraction of iron is dislodged to extraframework positions (ca. 50%), while Al is hardly affected. Steam treatment leads to significant dealumination of the zeolite structure, the complete extraction of isomorphously substituted iron, and the clustering of extraframework iron species into highly dispersed oxide nanoparticles of 1-2 nm, containing Fe and probably Al. Various Fe species were identified in the final catalyst. A large fraction of iron in the steamed FeZSM-5 catalyst is in the form of these iron oxide nanoparticles. No larger particles were identified. Apart from these nanoparticles, framework iron, extraframework isolated iron ions, and small oligonuclear oxo-iron complexes in the zeolite channels were identified by Mossbauer spectroscopy and voltammetry. Steam treatment of FeZSM-5 decreases the density and strength of acid sites and leads to mesopore formation (around 11 nm), while the apparent crystalline structure and morphology are not altered. In the steamed sample, at room temperature, iron is mainly present as Fe(III), with a fraction of Fe(II) (at least 10%). H-2-TPR indicates that the fraction of Fe(II) in the material increases up to 50% by pretreatment in He at 623 K, by autoreduction of Fe(III) species. The fraction of Fe(III) reduced to Fe(II) depends on the duration of this pretreatment and appears to involve different species in the catalyst.