Catalytic decomposition of methane has been studied extensively as the production of hydrogen and formation of carbon nanotube is proven crucial from the scientific and technological point of view. In that context, variation of catalyst preparation procedure, calcination temperature and use of promoters could significantly alter the methane conversion, hydrogen yield and morphology of carbon nanotubes formed after the reaction. In this work, Ni promoted and unpromoted Fe/Al2O3 catalysts have been prepared by impregnation, sol–gel and co-precipitation method with calcination at two different temperatures. The catalysts were characterized by X-ray diffraction (XRD), N2 physisorption, temperature programmed reduction (TPR) and thermogravimetric analysis (TGA) techniques. The catalytic activity was tested for methane decomposition reaction. The catalytic activity was high when calcined at 500 °C temperature irrespective of the preparation method. However while calcined at high temperature the catalyst prepared by impregnation method showed a high activity. It is found from XRD and TPR characterization that disordered iron oxides supported on alumina play an important role for dissociative chemisorptions of methane generating molecular hydrogen. The transmission electron microscope technique results of the spent catalysts showed the formation of carbon nanotube which is having length of 32–34 nm. The Fe nanoparticles are present on the tip of the carbon nanotube and nanotube grows by contraction–elongation mechanism. Among three different methodologies impregnation method was more effective to generate adequate active sites in the catalyst surface. The Ni promotion enhances the reducibility of Fe/Al2O3 oxides showing a higher catalytic activity. The catalyst is stable up to six hours on stream as observed in the activity results.