Hydrogen storage based on the repeated reduction and oxidation (redox) reactions of iron oxide/iron composites represents a promising technology. This work is dedicated to studying the influence of the amount of water added during the pelletizing process on the cycle stability and structure of iron oxide pellets. The storage composites were prepared from iron oxide (Fe2O3) and 10 wt.-% support material (cement) with different amounts of water (18 and 33 wt.-%) in a laboratory-scale pelletizing disk. To evaluate the cycle stability of the composites, the kinetics of the redox reactions were experimentally measured at 800 degrees C in an atmosphere of 50% N-2 and 50% H-2 (reduction) or 50% steam (oxidation), respectively. Moreover, the structure of the pellets was analyzed by micro-computed tomography scans. It turned out that pellets with higher water contents attained faster kinetics and a higher cycle stability. The sample with the least water content (18 wt.-%) needed about 26 min and 19 min to reach a conversion rate of 80% during the reduction and oxidation reactions of the sixth redox cycle, respectively. In contrast, the sample with the highest water content (33 wt.-%) could achieve the same conversion rate after 18 min (reduction) and 13 min (oxidation) during the ninth redox cycle.