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Although carbonyl iron powder (CIP) is an old material for magnetic applications (e.g. inductor cores), the structure of this material is still described controversially in literature. On the first glance a greyish powder exhibiting a spherical structure, CIP reveals on the second glance a nanoscopic crystalline sub-structure. The material itself contains carbon and nitrogen and its structure is described as an onion-type structure. However, the nature of the different shells and clarity on the nature of the involved carbidic and/or nitridic phases, be they crystalline, amorphous or solid solutions has not yet been achieved. In addition, it is known, that CIP transforms in H2-atmosphere to a “soft” grade, consisting of pure Fe. Again, chemical and microstructural knowledge on the transition from the “hard” to the “soft” CIP is lacking. This leads to the motivation of this study: 1. Unambiguously identify the nature and existence of the involved phases in the unreduced and hard carbonyl iron powder and in the reduced and soft iron powder particles 2. Characterize the phase transformations and microstructural changes of CIP during the thermic treatment in a hydrogen atmosphere. Different techniques were used to clarify the above mentioned points like in-situ synchrotron XRPD accompanied by electron microscopy techniques.