Chemical looping combustion (CLC) offers a novel approach to simultaneous power generation and carbon capture. However, the commercial viability of CLC depends on durable and cost‐effective oxygen carriers (OCs). This study assesses the impact of water vapor (WV) on the attrition of red mud OC, crucial for industrial CLC deployment. Findings indicate a significant reduction in the average attrition rate, from 0.06%/h to 0.03%/h, attributed to the limitation of Fe2O3 reduction, resulting in reduced volumetric and temperature changes in the presence of WV. A developed volume‐based model reveals attrition contributions in the order of chemical > mechanical >> thermal stresses, influencing OC particle surface morphology. Remarkably, the formation of the iron‐oxide layer remains unaffected by WV, reducing agents (CO or H2), or superficial velocities, suggesting scalable iron recovery from attrition with enhanced flexibility in future applications.