According to the latest reports, the iron and steel industry is not on course to achieve net-zero emissions by mid-century, as total emissions continue to increase. However, there is a growing number of announcements for new projects focused on near-zero emission iron and steel production. The hydrogen-based direct reduction has gained renewed interest among researchers, policymakers, and industries due to positive outlooks on sufficient and affordable green hydrogen production. The current study investigates the hydrogen reduction of industrial hematite iron ore pellets containing ∼96.9% Fe2O3. The isothermal reduction experiments were carried out using pure H2 in a custom-made thermogravimetric setup. The reduction experiments were performed at 700 and 1000 °C. The surface morphology, microstructure, and chemical composition were investigated for an intermediate state (50% reduced) and near-complete reduction (>95% reduced). The thermogravimetry results showed that, at 1000 °C, the average reduction rate during the initial stage (≤30% reduction) was 5.6 times higher than the reduction rate at 700 °C. Nevertheless, the increased reduction kinetics observed at elevated temperatures led to more microstructural defects, such as cracks and pores. Based on the macroscopic surface investigations, the severity of cracking seems to be strongly affected by the reduction temperature and, to a slightly lesser extent, by the degree of reduction at a particular temperature. Both temperatures exhibited a porous surface morphology; however, at 1000 °C, the progression of pore sintering over time resulted in a surface covered with dense iron particles.