This paper describes the chemical nature of concrete and the internal environment in which the steel reinforcement is situated. The electrochemical basis for passivity of iron in aqueous solution is discussed and the anodic and cathodic reactions which occur are detailed in relation to pH-potential (Pourbaix) and current-potential (Evans) diagrams. The observed behaviour of iron in solution is compared to the behaviour of reinforcement in concrete. The breakdown of the passive film is discussed in relation to the commonly observed causes of deterioration of reinforced concrete i.e. carbonation of concrete, the presence of chloride ions at the steel surface and sulphate attack. Results of an SEM-EDS study of chloride-induced breakdown of the passive film are presented. The effects of the surface condition of the reinforcement prior to its inclusion in concrete and the use of latent hydraulic binders and thermosetting plastic coatings (fusion bonded epoxy) in relation to passivity and corrosion behaviour are discussed.