A process for conversion of hydrogen and carbon monoxide into hydrocarbons in the presence of an ebullient bed of catalyst comprising reduced iron oxide containing an amount of potassium equivalent to 2 to 10 pounds potassium carbonate per 1000 pounds iron oxide catalyst, and having an average particle size in the range of 100-1000 microns. The catalyst may be sulfided for increasing the yield of C.sub.1 -C.sub.4 range hydrocarbons.