Thermally treated iron-containing clay was used as a greener oxidation catalyst for the conversion of tetrahydrofuran (THF) to butyrolactone (BTL). Mild liquid phase reactions were tested at 50–66 °C using hydrogen peroxide (H 2 O 2 ) as an oxidizing agent. XRD, TGA, ESR, DR-UV, and FTIR revealed the dislodged iron oxide species formed by treating at ≥500 °C. Formation of active oxidizing species on the surface occurs on contact the dislodged Fe( III ) oxide with H 2 O 2 . Such active species can promote the oxidation of THF, giving high yield and selectivity of BTL, whereas the iron-containing clay treated at lower temperatures (<500 °C) perform Fenton-like oxidation with lower THF conversions and non-selective products. 2-Hydroxytetrahydrofuran (THF-2-ol) was primarily produced and further oxidized to BTL with a small amount of 4-hydroxybutyric acid as a minor product. Minimal H 2 O 2 /THF ratio of 1.0 is sufficient for the production of BTL. Deactivation can be observed presumably due to deposition of the products despite slight leaching of the active iron species.