The effect of nanostructure on the thermal oxidation of atomized iron has been investigated. Above 500°C atomized iron is oxidized in the presence of air. However, when iron is compacted with multiwalled carbon nanotubes (MWCNT) this oxidation is shifted by more than 100°C. Iron is protected by the nanostructure environment A large number of compositions of atomic ratios of iron and MWCNT have been examined in this study to understand the effect in detail. The effect of nanostructure in the thermal oxidation of iron is interpreted as due to iron atom experiencing extensive overlap and confinement effect. causing spin transfer. Based on theoretical calculations reported in the literature this confinement effect of iron is suggested to produce a transformation from 3d64s2 to an effective configuration of 3d84s0 producing spintronics effect.