Fused iron (FI), is a general Fischer–Tropsch synthesis (FTS) catalyst and can be used to convert syngas (CO+H2) into normal hydrocarbons. The syntheses of HZSM-5 or H-β zeolite-shell encapsulated catalysts for FTS have been reported previously, however, conventional zeolite-shell synthesis generally employs an organic template, which is neither economic nor environmentally benign. Here we report the synthesis, without using an organic template, of a millimeter-sized defect-free capsule catalyst covered by a MOR zeolite shell (thickness of 23 μm) on FI pellets. The capsule catalyst (HMOR/FI) exhibited excellent performance for FTS, greatly increasing the selectivity of middle isoparaffins. Compared with the pure FI catalyst, the CO conversion of the HMOR/FI capsule catalyst increased remarkably and the iso/n ratio was almost 8 times that of the pure FI catalyst. This report provides an effective route to synthesize a capsule catalyst, which can reduce costs effectively and is also more environmentally benign than the current conventional zeolite-shell synthesis.