Pure nanocrystalline hematite (40 to 100 nm) compacts were prepared and sintered at various temperatures (300°C to 600°C) and then reduced with 100 pct H 2 at 500°C. On the other hand, fired compacts at 500°C were reduced with a H 2 -Ar gas mixture containing different concentration of hydrogen (100, 75, 50, and 25 pct) at 500°C using thermogravimetric techniques. Nanocrystalline Fe 2 O 3 compacts were characterized before and after reduction with X-ray diffraction, scanning electron microscopy (SEM), vibrating sample magnetometer (VSM), and reflected light microscope. It was found that the fired compacts at 400°C to 600°C have relatively faster reaction behaviors compared to that at lower firing temperature 300°C. By decreasing the firing temperature to 300°C, partial sintering with grain growth was observed clearly during reduction. Also, it was found that the reduction rate increased with increasing hydrogen content in the reducing gas. Comparatively, grain growth and partial coalescence took place during reduction with 25 pct H 2 due to long reaction time.