Hydrogen-based direct reduction presents a promising pathway for decarbonising steel sector by producing water vapour instead of carbon dioxide during iron ore reduction compared with conventional fossil fuel-based blast furnace process. Iron ore pellets are a critical feedstock for direct reduced iron process. Magnetite concentrates are preferred for pelletising due to their favourable pelletisation characteristics and high quality after beneficiation. Australian iron ores are predominantly hematite-goethite, traditionally exported as sinter fines for blast furnace ironmaking. In particular, the hydrated nature of goethite presents challenges for pelletisation, often necessitating the use of selective binders or specialised processing routes to achieve sufficient pellet strength and quality. As a result, Australian hematite-goethite ores are more challenging to pelletise than magnetite concentrate. Understanding the metallurgical properties of pellets under hydrogen reduction conditions is therefore crucial not only for understanding their behaviour during the direct reduction process in shaft furnace but also for optimising the pelletising process. In the present study, pellets produced from an Australian hematite–goethite ore at CSIRO’s Queensland Centre for Advanced Technologies were evaluated in terms of their metallurgical properties. Two reducing gas atmospheres were employed to simulate operational environments: a reference gas mixture consisting of CO and N2 representing of conventional reduction conditions and a target hydrogen-enriched reduction atmospheres applicable to the emerging low-carbon steel production technologies. This study systematically examined the reduction swelling behaviours at different reduction durations and assessed the effects of reaction temperature as well as low temperature reduction disintegration under the target gas composition on the metallurgical performance of the fired pellets. The microstructure and mineral phase of both raw and partially reduced pellet samples were examined using X-ray diffractometry (XRD) and optical microscopy to understand the structural evolution of pellets during reduction. The findings of this study demonstrated that pellets produced from Australian hematite–goethite ores exhibit measurable structural integrity and satisfactory reduction performance under hydrogen-enriched conditions.