The effects of steam, fed to the riser section of a laboratory recirculating solids reactor, on butane oxidation over a vanadyl pyrophosphate catalyst are reported. Gas fed to the riser was either butane in inert or butane co-fed with oxygen in inert. The catalyst regenerator-vessel was fluidized with air in all cases. It was observed that steam added to the riser competes for sites required for gas-phase oxygen activation, while catalyst lattice oxygen utilization is not affected. The competition for sites with oxygen causes a decrease in butane conversion and a corresponding increase in selectivity to maleic anhydride. The improvement in selectivity is more pronounced under anaerobic conditions, and an explanation for this result is offered. This study demonstrates the opportunity offered by a recirculating solids reactor to study various aspects of selective oxidation catalysis independent of the complicating effects of simultaneous catalyst reduction and oxidation reactions.