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Iron-based alloys are the most hopeful interconnects of intermediate temperature solid oxide fuel cell (IT-SOFC). Fe-16Cr alloy is one of the common iron-based alloys. Oxidation of the alloy is the key issue in the running process, which could be described in terms of diffusion path. Chemical potential, which is one of the primary factors to the diffusion process, is determined by the thermodynamics. The equilibrium phase in the oxidation of Fe-16Cr alloy was analyzed for better understanding of the mechanism of alloy oxidation in varied atmosphere. A novel form of thermodynamic diagram associated to the oxidation process was given. Phases in the equilibrium are changing with the quantitative increase of reacted fuel gas during the process. The diagram of Fe-16Cr alloy in atmospheres at cathode and anode sides were calculated. The diagram gives the intuitionistic phase transformation process corresponding to the practical oxidation process in the view of thermodynamics.