The stability of isolated extraframework Fe(2+) ions in ZSM-5 zeolite and their reactivity in the benzene to phenol oxidation were studied by periodic OFT calculations. Mononuclear iron(II) cations can only be stabilized at very specific exchange sites of ZSM-5 zeolite. Accordingly, iron will be predominantly present as oxygenated/hydroxylated mono- and binuclear iron complexes in Fe/ZSM-5. The reactivity of isolated Fe(2+). does not depend on the local coordination environment around iron, whereas the steric constraints imposed by the zeolite lattice are important for the overall catalytic reactivity. [FeO](+), [HOFe(mu-O)FeOH](2+), [Fe(mu-O)(2)Fe](2+), [Fe(mu-O)Fe](2+). extraframework complexes are also potential sites for benzene activation. The reaction is however not catalytic in these cases because the vacant active site cannot be regenerated. The presence of basic extraframework O ligands in these complexes favors phenol dissociation resulting in the formation of stable grafted phenolate species, and ultimately, to the deactivation of the oxygenated iron complexes. (C) 2011 Elsevier Inc. All rights reserved.