The increasing trend in the prices of steel scrap and its short supply led the steel technologists to find a suitable charge mix in the form of sponge iron or Direct Reduced Iron (DRI). Sponge Iron or DRI is obtained from the direct reduction of iron ore and has iron content between 84 to 95 percent. Technically and technologically, sponge iron has been found to be a suitable material for charging in blast furnaces. In the existing blast furnace an increase in production by at least 25 to 35% can be achieved by using pre reduced iron ore. Sponge iron is a better substitute for scrap for steelmaking through EAF / IF routes due to its homogenous nature, Improved productivity and lower coke consumption. Also majority of fines which are generated during the course of handling, mining, transportation etc are exported at a through away price which need to be utilized by making iron ore pellets for sponge iron making. According to industry experts, the preference for usage of DRI will lead to the use of 80 percent DRI in the charge mix in EAFs by 2009-10 which may even reach the 85 percent level by 2011-12 in the various regions of India. A lot of investigations have been carried out on direct reduction process of iron oxides by carbonaceous materials, but little work has been done on the characterization of properties and reduction behavior of iron ore of some mines of Orissa. In the present project work, an attempt has been made to study the reduction behavior and kinetics of fired iron ore pellets. The effect of firing temperarure (1000, 1100 and 1300oC), binder (concentrated sugar cane juice) on strength of pellets and the effect of different reduction parameters such as temperature (850-1000°C), time (0-90min.), reductant quality, mixing of particles of different sizes at different ratios for pellet preparation etc. on the reduction, swelling behavior of iron ore pellets. These form the subject matter of the thesis. First chapter gives the introduction about the subject. It speaks about the need of DRI industry, scope, present status and future planning of DRI industry in India, world wise DRI production, etc. The second chapter deals with the literature survey. The third chapter deals with selection of raw materials, preparation of samples, preparation of iron ore pellets, experimental procedure. Results and discussions are out lined in fourth chapter. Lastly, these conclusions have been followed by the suggestion for future work and list of references.