To successfully transition from fossil-fuel to sustainable carbon-free energy carriers, a safe, stable and high-density energy storage technology is required. The combustion of iron powders seems very promising in this regard. Yet, little is known about their in-process morphological and microstructural evolution, which are critical features for the circularity of the concept, especially the subsequent reduction of the combusted oxide powders back to iron. Here, we investigated two iron powder combustion pathways, one in air and one with the assistance of a propane pilot flame. Both processes resulted in spherical hollow particles composed of a complex microstructure of wüstite, magnetite and/or hematite. Partial evaporation is indicated by the observation of nanoparticles on the micro-sized combustion products. The associated gas production inside the liquid droplet could be the origin of the internal porosity and micro-explosion events. Cracking at the end of the combustion process results in mostly open porosity, which is favorable for the subsequent reduction process. With this study, we aim to open the perspective of iron metal fuel from macroscopic combustion analysis towards a better understanding of the underlying microscopic thermodynamic, kinetic, microstructural and thermomechanical mechanisms.