Effects of oxidation rate of Fe powder in Fe–air solid oxide rechargeable battery on discharge potential and capacity were studied. From the measurement of PO2 in Fe set chamber and AC impedance for electrode reaction, oxidation rate of Fe, i.e., formation rate of H2, was an important parameter for discharge performance of Fe–air solid oxide battery. Slow oxidation rate of Fe, namely, low current density, shows high discharge potential, however, caused sintering of Fe powder resulting in the decreased discharge capacity and so decreased usage efficiency of Fe powder. On the other hand, larger capacity (1145 mAh gFe−1), which is close to the theoretical capacity, can be achieved at higher discharge rate of 30 mA cm−2 at 873 K. Therefore, higher current density seems to be suitable for larger discharge capacity. Concentration overpotential is negligibly small at initial stage of discharge, however, with discharge period, diffusion overpotential became significantly enlarged caused by the slow oxidation rate of Fe. Sintering of Fe powder was observed after discharge at 5 mA cm−2 by SEM and TEM observations and so fast oxidation rate at larger current density can be assigned to bulk oxidation of Fe powder with small particle size sustained during discharge.