As a primary constituent of renewable biomass fuel, lignin can be effectively utilized as a reducing agent in the ironmaking process, thereby significantly mitigating CO2 emissions throughout the procedure. This study meticulously evaluates the impact of lignin on the reduction of iron ore powder across diverse levels of mechanical activation through thermogravimetric analysis. It elucidates the intricate reduction mechanism at play. The reduction process is characterized by two pivotal stages: the initial reduction of pyrolysis gases followed by the reduction of fixed carbon, which predominantly drives the transformation of iron ore powder. While mechanical activation exhibits a negligible influence on the first stage, it exerts a pronounced effect on the second. An extended activation time elevates the depth of reduction in the latter stage. Furthermore, the heating rate plays a crucial role in the reduction process, with slower rates favoring the reduction of pyrolysis gases and faster rates boosting carbon fixation reduction. Enhanced activation durations lead to improve linear regression fits for the reduction reaction data. Utilizing the carbon gasification model for iron ore powder treated with 480 min of activation yields a calibration variance of 0.99, with the derived activation energy of 48.75 kJ/mol aligning closely with empirical values. This research provides a thorough analysis of the reduction kinetics and mechanism, underscoring the transformative potential of lignin as a reducer in ironmaking processes, thus contributing to the development of sustainable, low-carbon technologies.