In the gasification process, tar material may cause operational problems, such as carbon deposition over a catalyst, pipe plugging, condensation, and tar aerosol formation. Unusual approaches should be introduced to solve carbon deposition over a catalyst, which was a serious problem in the tar decomposition process. The utilization of low-grade iron ore as a catalyst and effect of adding steam in the tar-reforming process were evaluated through this study. As a result of insufficient energy to remove the OH group at the dehydration below 200 °C, the generation of pores within iron ore was still incomplete. On the other hand, the generation of pores increased rapidly between 200 and 300 °C, which was indicated by increasing the Brunauer–Emmett–Teller surface area. The phase of iron ore was changed along the process and may increase the catalyst activity during the reforming process. The utilization of low-grade iron ore in the steam reforming of tar significantly increased the total gas production, especially H2 and CO2. This was due to the porous iron ore being able to provide a high surface area for the tar decomposition reaction. The addition of steam to the tar decomposition reaction increased the gas product and decreased the carbon formation. The excessive increase of gas production occurred at the decomposition of 800 °C, such as H2, CO, and CH4. Therefore, steam reforming using low-grade iron ore was a promising candidate to solve the tar material problem.