Iron ore reduction/cementation by CH₄–H₂–Ar gas (35 vol% CH₄, 55 vol% H₂ and 10 vol% Ar) was examined in a fixed bed reactor in the temperature range of 600–925°C. Iron oxides were first reduced to metalliciron and then iron was carburised to cementite. The rate of iron ore reduction and iron cementation in-creasedwith increasing temperature. Iron carbide formed in the reduction/cementation process was unstable and decomposed to metallic iron and carbon. Cementite stability was studied in the temperature range of 500–850°C. At temperature below 600°C and above 750°C, the rate of cementite decomposition in-creased with the increase in temperature. However, in the range of 600–750°C the rate of cementite decomposition decreased with increasing temperature. Cementite was the most stable at 750°C and least stable at 600°C. At 750°C, iron ore was converted to cementite by gas containing 35 vol% CH₄, 55 vol% H₂ and 10 vol% Ar in 15 min.