The reduction of carbon dioxide with hydrogen may be carried out over an iron catalyst at temperatures between 800 to 1000 K to yield carbon and water. This so-called Bosch process has been operated with several prototype recirculation systems. The water produced, however, has been significantly below what would have been expected if equilibrium had been achieved. The present study has shown that if the CO/CO//2 or H//2/H//2O concentrations in the reactor drop below critical values (which depend upon temperature), the iron ctalyst is oxidized and becomes non-catalytic. Similar restraints due to iron carbide formation do not appear to be as critical. A catalyst activation procedure is noted and optimal reactor recycle configurations discussed. Finally, the optimal operating conditions for the Bosch system using iron as a catalyst are specified.