The valorization of bauxite residue through hydrogen reduction followed by magnetic separation of iron and alkaline leaching of non-magnetic part for alumina recovery is a sustainable approach. In this research an experimental study was designed to investigate the effect of temperature and H2-H2O gas compositions on the reduction behaviour of iron oxides complex in Bauxite Residue (BR). Green pellets were made from a mixture of bauxite residue and Ca(OH)2 powders, which were subsequently sintered at 1150 °C. The sintered oxide pellets were reduced in a vertical furnace using H2-H2O gas mixtures at elevated temperatures using gas compositions ranging from 0-25% H2O. Total flow of the H2-H2O gas mixture was kept at 1 L/min to ensure comparative reduction potentials. X-Ray Diffraction (XRD) and Scanning Electron Microscope (SEM) coupled with energy dispersive spectroscopy (EDS) were employed to characterize the reduced pellets. It was found that the iron oxides exist as complex Brownmillerite phase in the sintered pellets. Lower temperature and higher H2O content of gas could inhibit reduction of Wüstite to metallic iron. Such behaviour was observed when H2O gas composition is higher than specific compositions at different temperatures. Pellets reduced at higher temperatures were found to produce significantly smaller pore size but with comparable surface area to pellets reduced at lower temperatures which suggests notably different pore structures.