Earth-abundant iron oxide is an important catalyst for the production of hydrogen via a broad range of catalytic reactions, including the high-temperature water–gas shift reaction (HT-WGSR). For iron oxide catalysts, the aluminum (Al) dopant, with a relatively large concentration of ∼5 wt %, is commonly considered as a textural promoter to stabilize the active phase magnetite. However, the role of Al and its underlying mechanisms are yet to be fully understood. Here, we report the discovery of a volcano-shaped correlation between the Al doping amount and catalyst activity and, potentially, an extremely low yet optimum content of ∼0.85 wt % for Al. Such a low-content Al is initially highly dispersed within iron oxide, exerting a negligible effect on the catalyst structure. However, it can undertake in situ transformation into a Fe3O4@Fe(Fe1–x,Alx)2O4 core–shell structure during H2 reduction. The resultant catalyst outperforms pure magnetite (Al-free) and those with larger Al contents, enabling the achievement of the thermodynamic limit of 76–80% CO conversion at 425–450 °C and a low apparent activation energy of ∼41 kJ/mol compared to its high-Al counterparts. Advanced in situ and ex situ characterizations, along with density functional theory (DFT) calculations, confirmed a preferential diffusion of Al on the catalyst surface/shell, occupying the octahedral Fe sites of magnetite which are in turn highly activated in moderating the adsorption of CO and simultaneously alleviating the hydrogen-binding energy for a spontaneous H2O dissociation. In contrast, for the high-Al content such as 1.72 wt %, phase segregation for the formation of discrete alumina occurs on the surface, exerting strong adsorption of CO but weak adsorption of H2O at temperatures >400 °C. This in turn poisons and deactivates the catalyst quickly. By precisely controlling the amount of a dopant such as Al on the atomic level, the activity of the iron oxide-based catalysts can be unlocked in achieving maximal performance.