The product distribution in direct alkane functionalization by oxyhalogenation strongly depends on the halogen of choice. We demonstrate that the superior selectivity to olefins over an iron phosphate catalyst in oxychlorination is the consequence of a surface‐confined reaction. By contrast, in oxybromination alkane activation follows a gas‐phase radical‐chain mechanism and yields a mixture of alkyl bromide, cracking, and combustion products. Surface‐coverage analysis of the catalyst and identification of gas‐phase radicals in operando mode are correlated to the catalytic performance by a multi‐technique approach, which combines kinetic studies with advanced characterization techniques such as prompt‐gamma activation analysis and photoelectron photoion coincidence spectroscopy. Rationalization of gas‐phase and surface contributions by density functional theory reveals that the molecular level effects of chlorine are pivotal in determining the stark selectivity differences. These results provide strategies for unraveling detailed mechanisms within complex reaction networks.