An alternative laterite nickel ore processing using sulfuric acid as a leaching agent to produce class 1 nickel as a raw material for electric vehicle batteries produces natrojarosite residue as a by-product during the precipitation of iron and aluminum step. The natrojarosite residue contained iron and high sulfur, which is challenging to utilize as an iron source for steel manufacturing since sulfur can contaminate the steel product. This study focuses on sulfur elimination and iron extraction from natrojarosite. The natrojarosite was roasted for sulfur removal isothermally at different temperatures ranging from 500 until 1100 °C for 4 h. Roasting at 1100 °C resulted a decrease in sulfur content from 12.18% to 3.81% and an increase in iron content from 16.23% to 28.54%. The sulfur released during roasting can, in principle, be recirculated to a sulfuric acid plant and reused as a leaching agent in the nickel ore processing plant. The unroasted and roasted natrojarosite residues were then reduced by coconut shell charcoal in the temperature range of 1000–1400 °C. The results showed that the metallic iron could be obtained from both unroasted and roasted natrojarosite residue at a temperature of 1200 °C and higher. The sulfur content in the oxide phase of unroasted natrojarosite residue was significantly higher than roasted natrojarosite residue. However, the roasting did not significantly influence the sulfur content in the metal phase. The sulfur content in the metal phase from unroasted and roasted natrojarosite residue was less than 1.2%. This result indicated that the removal of sulfur and metal oxide reduction in the natrojarosite residue could be carried out simultaneously in one stage where the natrojarosite residue is reduced by carbonaceous material at a temperature of 1200 °C or higher.