In this study, the synthesis of cementite from iron oxide was firstly attempted. Then, reduction and sintering behavior of cementite powder was studied for developing a new way of steel making using cementite. It is confirmed that cementite can be obtained by the way to carbonize the iron oxide with H-2-CH4 gas mixture. The cementite compact was completely reduced at 873K- 1273K. The porosity of samples became larger than the cementite compact at the reduction below 1023K, while that became smaller above 1073K. Although the porosity of the samples became the smallest at 1273K in all samples, the some big pores remained. The best temperature for reduction and sintering was around 1123K to obtain the optimum microstructure.