The present work undertakes the preparation and physico-chemical characterisation of iron promoted sulphated zirconia (SZ) with different amounts of iron loading and their application to Friedel-Crafts benzoylation of benzene, toluene and xylene under different experimental conditions. XRD and laser Raman techniques reveal the stabilisation of the tetragonal phase of zirconia and the existence of iron in highly dispersed form as Fe2O3 on the catalyst surface. The surface acidic properties were determined by ammonia temperature programmed desorption (TPD) and perylene adsorption. The results were supported by the TGA studies after adsorption of pyridine and 2,6-dimethylpyridine (2,6-DMP). Strong Lewis acid sites on the surface, which are evident from TPD and perylene adsorption studies, explain the high catalytic activity of the systems towards benzoylation. The experimental results provide evidence for the truly heterogeneous nature of the reaction. The studies also establish the resistance to deactivation in the metal incorporated sulphated systems.