The transformation of ethanol on Fe ion-exchanged mordenite was compared in the temperature range of 200–400 ◦C for samples prepared in the solution and solid states. Ethane and methane were found as rather major products, compared to acetaldehyde and acetone. Diethyl ether was also detected as a dehydration product. The conversion was found to increase monotonically (to 96%) with increasing the Fe content (to 100%) and reaction temperature to 400 ◦C. The selectivity towards acetaldehyde and acetone was found maximum at the temperature 300 ◦C. Decrease in the catalyst Brönsted acidity due to ion-exchange in solution caused a marked increase in the selectivity toward acetaldehyde at 300 ◦C. At variance, Fe ion-exchanged in the solid state resulted in a higher Brönsted acidity catalyst of higher selectivity to acetone. The solid state exchanged catalyst formed more coke at 400 ◦C. The higher zeolite acidity catalyzes the ethane propagation into the coke precursors. The extraordinary formation of ethane as a dominant transformation product (in the absence of H2 gas supply) is explained mainly to the O-abstracting affinity of the Fe3+ ion. Methane may be formed as a result of decomposition reaction at high temperatures. Mössbauer and XRD were applied for characterizing different Fe species involved as active sites in the reaction. Coke deposited on the catalysts was measured by TGA. Other helpful information was obtained from BET of N2-adsorption and FT–IR of NH3-adsorption. Fair correlation between the active sites responsible for formation of the various products and the zeolite