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The magnetic reorientation transition for ultrathin Fe films on Gd is studied. At low temperatures, the films are magnetized in plane and at intermediate temperatures they undergo a reorientation to out of plane. The reorientation is attributed to the reducing magnetization of Gd as it approaches its Curie temperature and the perpendicular magnetic anisotropy at the Fe surface. Detailed measurements of the reorientation were made in situ using the magneto-optic Kerr effect (MOKE). The first step, at low temperature, is a continuous, reversible reorientation of the surface moment from in plane to canted out of plane; a corresponding peak in the susceptibility identifies it as a second-order phase transition. The second step is a discontinuous, irreversible rotation from this canted direction to perpendicular to the film plane; thermal hysteresis of the magnetization identifies it as a first-order phase transition. The MOKE thermal hysteresis loop shows that the Gd surface region participates in the first-order phase transition.