Iron-based Fischer-Tropsch catalysts, which are applied in the conversion of CO and H2 into longer hydrocarbon chains, are historically amongst the most intensively studied systems in heterogeneous catalysis. Despite this, fundamental understanding of the complex and dynamic chemistry of the iron-carbon-oxygen system and its implications for the rapid deactivation of the iron-based catalysts is still a developing field. Fischer-Tropsch catalysis is characterized by its multidisciplinary nature and therefore deals with a wide variety of fundamental chemical and physical problems. This critical review will summarize the current state of knowledge of the underlying mechanisms for the activation and eventual deactivation of iron-based Fischer-Tropsch catalysts and suggest systematic approaches for relating chemical identity to performance in next generation iron-based catalyst systems (210 references).