This work investigates the effects of two kinds of iron ore on the pyrolysis characteristics of a low-rank bituminous coal from Hami, China. The pyrolysis and its product distribution were studied using a thermogravimetric analyzer and a fixed bed reactor. A gas chromatograph and a gas chromatograph mass spectrometer were employed to test the properties and composition of the pyrolytic products. Results showed that the pyrolysis temperature of the raw coal ranged mainly from 350 to 650 degrees C. The weight-loss rate reached a maximum of 6.95%/min at 443 degrees C. The weight loss was 44.27% at the final pyrolysis temperature of 750 degrees C. The tar yield of raw coal was 9.51% in the fixed bed reactor at 600 degrees C. Adding iron ore, which was intended for a lower tar yield and a higher fraction of light tar (boiling point <360 degrees C), had a catalytic effect on the pyrolysis of raw coal. With separate addition of hematite and specularite, both having a mass of 20% of the raw coal, coal weight loss increased by 3.86% and 5.56%, respectively, when the catalytic upgrading was at 600 degrees C, and good upgrading effect was obtained. Meanwhile, benzene homologue in tar increased slightly, by 0.62% and 1.44%, compared to that in the tar of the raw coal. The upgrading effects of iron ore on tar also lowered element O content in the resulting tar, by 36.89% with the addition of hematite and by 43.16% with specularite. The iron concentrate recovered was measured by magnetic separation method. The iron concentrate grade was 52.97% with hematite added in coal when the residence time of ultimate pyrolysis temperature was 25 min and the magnetic field strength was 96.48 kA/m, while it was 58.02% with specularite added when the residence time was 35 min and the magnetic field strength was 109.27 kA/m, both with a char grinding fineness of less than 0.074 mm (ground char accounting for approximately 80% of total char); iron concentrate recovery rate was 85.31% and 76.74%, respectively. The experimental results proved the feasibility of recovering iron ore in char by magnetic separation.