Indirect biomass gasification systems consist of two reactors: an oxidation reactor and a gasification reactor. A bed-material is used to transfer heat from the oxidation to the gasification reactor. Olivine has been widely studied as a reactive bed-material for this process. The iron in olivine can act as a catalyst for the decomposition of tars, produced during the gasification process. Moreover, iron is capable of transferring oxygen to the gasification reactor. In this study, we elucidate the role of iron in this chemical looping process. Mössbauer spectra show that during oxidation in O2/Ar at 750 °C, iron segregates out of the olivine matrix forming free iron oxide phases. These free iron phases form metallic iron upon subsequent reduction in hydrogen. Thermo gravimetric analysis (TGA) is used to quantify oxygen transport under alternating oxidizing/reducing conditions. TGA results indicate that at least 18% of all the iron, present in olivine, is capable of transferring oxygen on the time scale of minutes. X-ray photoelectron spectroscopy (XPS) combined with depth profiling provides insight in the dynamic behavior of olivine under relevant conditions. Iron enrichment at the surface is observed; oxidized olivine has an iron rich surface layer of 400 nm. The increased iron concentration is particularly pronounced at the outermost surface. Upon subsequent reduction, the iron quickly redistributes in the olivine toward the original, homogeneous distribution. These results show that oxygen transport should be taken into account when olivine is evaluated as a catalyst for indirect biomass gasification. Furthermore, both oxygen transport and catalytic properties are heavily dependent on the iron phases present in the material, which in turn depend on the gas environment.