Abstract: Current research predominantly focuses on high-phosphorus iron ore (HPIO), where phosphorus mainly exists in the form of apatite. The reaction pathways of apatite during direct reduction have been elucidated. However, studies on phosphorus-bearing minerals within iron oxides themselves remain limited, and the transformation behavior of phosphorus associated with these iron minerals during reduction is not well understood. This study investigated the removal behavior of phosphorus within iron minerals during a direct reduction followed by magnetic separation process (DRMSP). FactSage software, X-ray diffraction (XRD), X-ray photoelectron spectrometer (XPS), and scanning electron microscopy coupled with energy dispersive spectroscopy (SEM–EDS) were employed to elucidate the reaction mechanisms of phosphorus within iron minerals and the intrinsic relationship between iron reduction and phosphorus transformation. The results demonstrated that under the condition of 10% straw-derived biochar usage and reduction at 1200 ℃ for 70 min, direct reduced iron (DRI) was obtained with an iron grade of 94.79%, iron recovery of 75.07%, phosphorus content of 0.09%, and phosphorus removal rate of 90.56%. Mechanism analysis confirmed that phosphorus within the iron minerals reacted with calcite to form apatite during the reduction of magnetite and hematite to wustite. The reduction of apatite was governed by the availability of free silica. The formation of fayalite consumed free silica, inhibiting the reduction of apatite. Conversely, the reduction of fayalite released free silica, which promoted the reduction of apatite. The elemental phosphorus generated then reacted with metallic iron to form an iron–phosphorus alloy.