This paper presents an initial part of a project devoted to the recycling of mill scale in the form of selfreducing briquettes. First chemical and morphological characteristics of mill scale were investigated and next its gaseous reduction behavior was studied by thermogravimetry. The chemical characterization showed that wustite is the major constituent of this waste matter, with small amounts of magnetite, hematite and metallic iron. The microscopic examination of the scale revealed its complex and layered microstructure with three distinct zones. The outer layer is relatively thin and porous. It is mainly composed of hematite and magnetite. The intermediate layer is made of the dense, columnar grains of wustite. The inner layer is a very porous wustite. The gaseous reduction by carbon monoxide has a topochemical character regardless of initial morphology of scale and, depending on temperature and reducing gas composition it produces a porous iron or the iron whiskers. The unreacted shrinking core model with one interface fits quite well the kinetic data and the activation energy of reduction is about 80 kJ/mol.