In the chemical reaction \( 4 \text{Fe} + 3 \text{O}_2 \rightarrow 2 \text{Fe}_2\text{O}_3 \), the atoms of Fe and O2 are rearranged. This means that the atoms combine in new ways to form a different substance (iron(III) oxide, or rust). Therefore, the correct response is:
They are rearranged.