C NTs -Fe/Fe 3 C-Al 2 O 3 nanocomposite powders have been prepared by selective reduction of an α-Al 1.9 Fe 0.1 O 3 solid solution in H 2 -CH 4 gas mixtures (0, 1.5, 3, 4.5, 6, 9, 12, 14, 16, 18, 24, 30 and 45 mol% CH 4 ). The powders have been studied using macroscopic and microscopic techniques. The C NTs are arranged in very long bundles homogeneously dispersed in the composite powder. Most C NTs have less than four walls and are free of pyrolytic or amorphous carbon deposits. The inner diameter is in the range 1-6 nm, which could indicate that the catalyst particles active for C NTs formation are in this size range. The reduction of the Fe 3+ ions to metallic Fe is highly favoured by the presence of CH 4 in the reduction atmosphere. There are more Fe 3 C than α-Fe particles located at the surface of the matrix grains for CH 4 contents higher than 4.5 mol%, however, the exact nature of the catalytically active particles remains an open question. Compositions in the range 9-18 mol% CH 4 give the best results.