CO2 hydrogenation conducted on Fe-based catalysts consists of a wide range of reactions with CO2 and H2 reacting in the reverse water-gas shift (RWGS) to produce CO and CO and H2 reacting in the Fischer-Tropsch (FT) type reactions leading to hydrocarbons and oxygenates. Methanation and Boudouard side reactions are extremely detrimental to selectivity and stability of the Fe-based catalysts. The catalytic system is very complex, posing challenging issues that require fundamental understanding of the dynamics of changes in the catalytic phases, mechanism of key reactions, and effects of catalyst composition including key promoters. A comprehensive analysis of fundamental aspects of catalytic materials, phases, and promoters and the catalytic mechanisms are presented in this paper. It was established that the ratio of Fecarbide/Feoxide atoms at the surface of an activated catalyst responsible for its selectivity is determined by the environment of iron ions in oxide precursors changed by insertion of ions of other metals. Fungible liquid fuels were produced in bench scale reactors and demonstrated to be suitable as blending stock for transportation fuels. The techno-economic analysis of processes using CO2 and either water, biogas, or natural gas as feedstock was conducted. As expected, the production of eco-friendly, renewable fuels based on CO2 is not competitive with fuels based on crude oil because of the high cost of production of hydrogen.