This work describes a new biomass ironmaking that uses low-grade iron ore and woody biomass for promoting the direct reduction of a nanoporous iron ore infiltrated and carbonized with biomass tar (biotar). The mechanism and kinetics of the reduction reaction of the carbon-infiltrated ore were systematically studied by means of thermogravimetric analysis with X-ray diffraction (XRD) and Raman scattering spectrometry. The results showed that the carbon-infiltrated ore reduced at a significantly lower temperature than the mixture of reagent magnetite and metallurgical coke. It was confirmed that this high reactivity was due to the nanoscale contact between carbon and the ore and the less fused and less cross-linked nature of the biotar-derived carbon. From the combination of thermogravimetry and XRD analyses, it is revealed that the reduction reaction occurred serially in three steps: re-evaporation and/or carbonization of biotar, reduction of magnetite to wustite, and reduction of wustite to iron. Finally, the kinetic parameters for each reaction were summarized by the Friedman-Ozawa method.