The structural and electronic transitions induced by oxygen reduction in YBa 2 (Cu 1 - x Fe x ) 3 O y compounds have been studied by Mossbauer spectroscopy, and the results are compared with neutron diffraction data, obtained on the same e 5 7 Fe isotope enriched samples. It was found that after reduction the value of the quadrupole splitting for the Fe ions in Cu2 sites (the D3 doublet in the Mossbauer spectral is essentially smaller than that in the oxidized state. This is explained by a shift of the Fe ion along the c-axis towards the apical O1 oxygen, which makes the Fe position inside the oxygen pyramid (k = 5) more symmetric. Upon reduction, the Cu1 → Cu2 iron migration really takes place, and the particular Cu1 site, from which Fe migrates to Cu2 sites, is the pyramidal D2 local site. After the reduction, the charge and spin states of all ions in Cu1 layers change remarkably, and high spin Fe 3 + states appear in Cu1 sites (in the D1 and D2 local sites). A part of the Fe ions in the pyramidal Cu1 sites (the D2 local sites) is shifted along the a-axis towards the apical O5 oxygen. Thus, not only the oxygen coordination but also the local crystal structure and the electronic state of the Fe ions change upon doping.