The feasibility of the reduction of oxygen carrier Fe2O3 in chemical-looping combustion using solid fuel (lignite) provided a gasifying agent like steam was introduced into the reactor was investigated with a fixed-bed reactor. The X-ray diffractometer and scanning electron microscope were used for the characterization of the Fe2O3 and its reduction residue. Results strongly supported the feasibility of Fe2O3 reduction by lignite and obtaining pure CO2 from the off-gases. Fe2O3 can be fully converted to Fe3O4 by pyrolysis and gasification intermediates primarily H-2 and CO, which was confirmed by both the off-gas concentrations and X-ray diffractometer analysis. A 0.75 g portion of Fe2O3 can be completely reduced to Fe3O4 by the volatile matter released from 0.1 g coal, and Fe2O3 can be fully reduced to Fe3O4 by steam char gasification products provided that the molar ratio of carbon in char to Fe2O3 is 1:6. The purity Of CO2 in the Outlet gases was higher than 85% when Fe2O3 was reduced by intermediate products during coal pyrolysis, and the purity of CO, in the off-gases was higher than 95% when Fe2O3 was reduced by intermediate products resulting from steam char gasification, making CO2 sequestration disposal desirable for high purity CO2. The char gasification reaction rate was slow compared with the reactivity of the iron oxide with the char gasified intermediates, indicating that char gasification was the rate-limiting step in the reduction process. In the steam char gasification process, the times it took to reach 90% carbon conversion for K-10-char and Ca-10-char were 15 and 30 min, respectively, at 1123 K, but the time for the raw char was 50 min at 1173 K.