CO2 hydrogenation was investigated with a doubly promoted (Cu, K) silica containing iron catalyst. Hägg carbide (χ-Fe5C2) is the dominant phase obtained under CO activation conditions at 543 K and 0.1 MPa and it was stable under FTS conditions typical for coal or biomass derived syngas using a H2/CO ratio of 1:1 for at least ∼100 h TOS. An Fe-phase change occurs (χ-Fe5C2 → Fe3O4) after switching from H2:CO:N2 (1:1:2) to H2:CO2 (3:1). The distribution of hydrocarbon products changes significantly after switching to H2:CO2 (3:1), but then it slowly transformed to normal FTS products, albeit with over 3 times higher methane selectivity compared to FTS using H2:CO:N2 (1:1:2). A correlation was obtained between the rate of FTS and the % of Fe carbide indicating that iron carbide is the active phase for CO2-based FT synthesis. Irrespective of conditions (i.e., either H2:CO:N2 = 1:1:2 or H2:CO2 = 3:1) and the Fe phase, the methane selectivity appears to primarily depend on the H2/CO ratio.