The H-C-Fe interaction has been investigated in gamma-Fe with a stacking fault using a cluster model. The energy of the system was calculated by the atom superposition and electron delocalization molecular orbital method. The electronic structure was studied using the concept of density of states and crystal orbital overlap population curves. By modifying the geometrical positions of the impurity within the cluster we have found that C occupies nearly octahedral sites on the stacking fault plane.. The H does not reside in the vicinity of the C. The presence of C could reduce the detrimental effect of H on the Fe-Fe bonds. The present paper provides detailed energy mapping for C-Fe and H-C-Fe subsystems in the fault region. C-Fe and H-C equilibrium distances are reported and the orbital contributions to the bonding are also addressed. (C) 2003 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.