As the iron and steel industry now strives for a carbon neutral industry, hydrogen‐based direct reduction shaft furnace technology has become an alternative to the heavily fossil‐depending blast furnace route. Research questions related to the future full‐scale production have, therefore, become more interesting. Depending on the operational conditions, the H2 concentration and temperature will vary across the length of the reactor. This work studies the effect of nitrogen in a hydrogen‐reducing gas during the reduction of commercial iron ore pellets using thermogravimetric analysis. The reducing gas consisted of either pure hydrogen or a mixture of 90–70 vol% hydrogen and 10–30 vol% nitrogen at 773, 873, 973, 1073, and 1173 K. It is found that the reduction rate decreased with decreasing temperature and increasing nitrogen content. The effect of nitrogen on the reduction rate is more profound than expected from the decreased hydrogen partial pressure alone. To aid the discussion, partially reduced pellets are studied using optical and scanning electron microscopy. It is found that the microstructure is strongly dependent on the temperature but independent of the nitrogen content.