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Oolitic hematite abounds in the Guizhou Province of China but is hard to use with the traditional process. The reduction of Guizhou oolitic hematite by H2 was studied. Ore microscopy, phase change, and the metallization rate of oolitic hematite under different reduction conditions were characterized by optical microscopy, X-ray diffraction, and chemical analysis, respectively. The metallization ratio of the reduced sample increased with the increase of reduction time. The metallization ratio reached 80.75% when the temperature was 1000°C and the reduction time was 120 min. The new phases of FeAl2O4 and Fe2SiO4 can be generated during the reduction process, which hindered the reduction of the oolitic hematite.