We report a comprehensive theoretical study on reaction of methane by Fe-4 cluster. This Letter gains insight into the mechanism of the reaction and indicate the Fe-4 cluster has strong catalytic effect on the activation reaction of methane. In detail, the results show the cleavage of the first C-H bond is both an energetically and kinetically favourable process and the breaking of the second C-H is the rate-determining step. Moreover, our Letter demonstrates that the different cluster size of iron can not only determine the catalytic activity of methane but also control the product selectivity. (c) 2012 Elsevier B.V. All rights reserved.