We report gas-phase reactions of free iron-oxide clusters, FenOm+, and their Ar adducts with methane in the context of chemical processes in Mars' atmosphere. Methane activation was observed to produce FenOmCH2+/FenOmCD2+ and FenOmC+, where the reactivity exhibited size and composition dependence. For example, the rate coefficients of methane activation for Fe3O+ and Fe4O+ were estimated to be 1 × 10-13 and 3 × 10-13 cm3 s-1, respectively. Based on these reaction rate coefficients, the presence of iron-oxide clusters/particles with a density as low as 107 cm-3 in Mars' atmosphere would explain the rapid loss of methane observed recently by the Curiosity rover.