We have used polarized and unpolarized neutron diffraction to determine the spatial distribution of the magnetization density induced by a magnetic field of 9 T in the tetragonal phase of K0.8Fe1.6Se2. The maximum entropy reconstruction shows clearly that most of the magnetization is confined to the region around the iron atoms whereas there is no significant magnetization associated with either Se or K atoms. The distribution of magnetization around the Fe atom is slightly nonspherical with a shape which is extended along the [0 0 1] direction in the projection. Multipolar refinement results show that the electrons which give rise to the paramagnetic susceptibility are confined to the Fe atoms and their distribution suggests that they occupy 3d t2g-type orbitals with around 66% in those of xz/yz symmetry. Detail modeling of the magnetic form factor indicates the presence of an orbital moment to the total paramagnetic moment of Fe2+
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