Abstract: The hydrogen-based reduction of ultra-high-grade pellets is critical for the production of clean and specialty steels but is challenged by abnormal reduction swelling. This study investigates the swelling behavior of ultra-high-grade pellets during hydrogen reduction and proposes a two-step reduction strategy to suppress abnormal swelling. The results show that during high-temperature reduction, ultra-high-grade pellets exhibit rapid reduction rates but undergo abnormal swelling, with the reduction swelling index (RSI) reaching up to 99.4%. While demonstrating a relatively lower RSI at lower reduction temperatures, the pellets require a prolonged reduction duration. The abnormal swelling of ultra-high-grade pellets occurs when FeO is reduced to Fe, primarily attributed to the growth of iron whiskers on particle surfaces. During hydrogen reduction, the two-step reduction strategy effectively suppresses iron whisker formation and promotes the formation of porous and layered iron, reducing RSI to below 15% while maintaining rapid reduction. The first-step reduction should be conducted below the critical temperature for abnormal swelling, with the reduction degree of the pellet attaining 60% after the first-step reduction. Increasing the temperature of the second-step reduction does not exacerbate swelling but instead accelerates the reduction rate.