A process for the direct production of iron sponge. A mixture of carbon monoxide and hydrogen is used as the reducing agent. The equipment consists of three vertical ovens, for preheating, reducing, and cooling the charge, and apparatus for regenerating the spent gases. The ore is contained in a series of muffle trays, each tray holding about 3 tons of ore. These trays pass down through the preheating oven, where the ore is heated to 1,000 degrees C, and are then transferred to the reducing oven, where they are raised through and against the downward gas current, then transferred to the cooling shaft, and slowly lowered down it. The transfer of a tray from one oven to another is made without contact with air. The ore is preheated in the first oven by part of the gases from the reduction oven, and the sponge iron is cooled in the third oven to 50 degrees C by cold gas from a gas holder.