Nanoscale zero-valent iron (nZVI) based technologies are widely used in environmental applications for water treatment. Knowledge of preparation conditions and their influence on final product is crucial for successful reduction/modification of iron bearing precursors. For direct investigation of these issues, the high-temperature X-ray powder diffraction (HT-XRD) is powerful tool which allows monitoring of the transformation mechanisms as well as kinetics. While the mechanism of transformation is influenced mostly by composition of the precursor itself, reaction atmosphere and temperature, the kinetics is affected by amount of the precursor and particle size and morphology. Several examples of these issues covering reduction of various iron oxides to nZVI and their subsequent modification with inorganic (oxidic and carbon/carbidic) shell will be demonstrated. The creation of the shell is necessary for air stability and controlled reactivity of nZVI towards selected pollutants. While the oxidic shell on iron cores is primarily passivating, grows equally around whole particles and can be properly controlled its thickness, the carbon/carbidic shell grows with considerable different thickness around the cores, and additionally, the various carbon structures which are simultaneously formed (e.g. nanotubes) enhance the sorption capacity of the material. The in-situ investigated examples are enriched with a few other ex-situ prepared iron based nanomaterials which demonstrate the possibility of nZVI modification for improvement of their application potential.