The selective oxidation of CH4 in the aqueous phase to produce valuable chemicals has attracted considerable attention due to its mild reaction conditions and simple process. As the most widely studied catalyst for this reaction, Fe-ZSM-5 demonstrates high intrinsic activity and selectivity; however, Fe-ZSM-5 prepared using conventional methods has a limited number of active Fe sites, resulting in low CH4 conversion per unit mass of the catalyst. This study reports a facile organic-template-free synthesis strategy that enables the incorporation of more Fe into the zeolite framework with a higher dispersion degree compared to conventional synthesis methods. Because framework Fe incorporated in this way is more readily transformed into isolated extra-framework Fe species under thermal treatment, the overall effect is that Fe-ZSM-5 prepared using this method (Fe-HZ5-TF) has 3 times as many catalytically active sites as conventional Fe-ZSM-5. When used for the selective oxidation of CH4 with 0.5 M H2O2 at 75 °C, Fe-HZ5-TF produced a high C1 oxygenate yield of 109.4 mmol gcat–1 h–1 (a HCOOH selectivity of 91.1%), surpassing other catalysts reported to date. Spectroscopic characterization and density functional theory calculations revealed that the active sites in Fe-HZ5-TF are mononuclear Fe species in the form of [(H2O)3Fe(IV)═O]2+ bound to Al pairs in the zeolite framework. This differs from conventional Fe-ZSM-5, where binuclear Fe acts as the active site. Analysis of the catalyst and product evolution during the reaction suggests a radical-driven pathway to explain CH4 activation at the mononuclear Fe site and subsequent conversion to C1 oxygenates.