<p>The pickling sludge produced in the iron and steel industry, which also contained an amount of iron, was hazardous waste. It was an acceptable low-energy consumption method to recover iron from sludge environmentally friendly with semi-molten. This study explored the liquid fraction of semi-molten sludge and its effect on iron recovery during industrial pickling sludge carbon reduction. The liquid fraction distribution was identified by combining “in situ” observation with Image Pro statistical methods. The recovery of iron was used with magnetic separation. The results showed that temperature and slag composition were all influenced by the liquid fraction. The liquid fraction was 0 to 35% at temperatures of 1250 °C to 1400 °C within 10&#xa0;min, during which the average particle size of iron increased from 9&#xa0;μm to 90&#xa0;μm. The liquid fraction increased from 8 to 62% with the addition of Al₂O₃ to 15%, the recovery of iron from sludge was over 95%&#xa0;with a purity of 92.3% at 1300 °C. The distribution of iron particles over 0.15&#xa0;mm in size was about 80%. The liquid phase fraction of semi-molten slag was more than 30%, which could decrease the reaction temperature by nearly 100 °C and the recovery of iron from sludge was over 95% at 1300 °C.</p> Graphical Abstract <p></p>