Iron(III) oxide tablets were electrolytically reduced to iron in molten sodium hydroxide at 530 degrees C and recovered to produce iron with 2 wt.% oxygen suitable for re-melting. The cell was operated at 1.7 V and an inert nickel anode was used. The thermodynamics and mechanism of the process was also investigated. By controlling the activity of sodium oxide in the melt, the cell could be operated below the decomposition voltage of the electrolyte with the net sequence of events being the ionization of oxygen, its subsequent transport to the anode and discharge leaving behind iron at the cathode. A reduction time of 1 h was achieved for a 1 g oxide tablet (close to the theoretical reduction time predicted by Faraday's laws) at a current density of 520 mA cm(-2) with iron phase yields of similar to 90 wt.%. The energy consumption was 2.8 kWh kg(-1).