In order to study the effects of catalytic site position on Fischer-Tropsch (FT) reactions, a method was developed to control the position of the catalytic sites on either inner or outer surface of carbon nanotubes (CNTs). TEM analyses revealed that more than 70-80% of iron oxide particles can be controlled to be positioned at inner or outer surface of the nanotubes. Based on H-2-TPR analysis, deposition of iron oxide inside the nanotube pores resulted in easier reduction of the oxide at a lower temperature (from 418 to 381 degrees C). Catalytic performances of the catalysts in terms of FT experiment were tested in a fixed-bed reactor. According to the results of FT experiments, both catalysts showed similar initial %CO conversion (similar to 90%). However, the catalyst with catalytic sites inside the pores exhibited higher selectivity to heavier hydrocarbons. In addition, deposition of catalytic sites on interior surface of the nanotubes resulted in a more stable catalyst, while its counterpart experienced deactivation within a period of 125 h due to catalytic sites sintering. It is concluded that encapsulation of catalytic sites inside the nanotubes prevents the catalytic site agglomeration. (C) 2009 Elsevier B.V. All rights reserved.