Abstract: The reduction–smelting treatment of iron–rich, high–titanium bauxite residue encounters significant technical hurdles: elevated alumina content in the slag matrix exacerbates poor phase separation between molten iron and slag, while the conventional calcium–based fluxes induce perovskite (CaTiO3) formation in slag, leading to deactivation of titanium component. This study proposes the approach of substituting calcium–based fluxes with MgO to modulate the smelting slag system. The introduction of MgO ameliorates the melting environment and forms spinel phases with alumina, thus effectively mitigating the adverse impacts of alumina, including deteriorated slag fluidity, contamination of molten iron, and deactivation of titanium slag. The formation of Mg–pseudobrookite (MgTi2O5) phase facilitates the recovery of titanium from the slag. Experimental results indicate that pig iron with a purity exceeding 99.4% can be obtained by the smelting of pre–reduced bauxite residue (with metallization ratio of approximately 95%) at 1600°C for 60 minutes. The separated titanium slag (TiO2 grade exceeding 52%) primarily consists of Mg–pseudobrookite and rutile, rendering it suitable for the industrial TiO2 production.