The transition to more environmentally friendly steel production methods has intensified research into hydrogen-based direct reduction (HyDR) of iron oxide pellets. The aim of this study is to systematically investigate the kinetics of the reduction process, the evolution of porosity and the resulting microstructural changes on the reduction behavior of high-quality pellets during HyDR of iron ore at different temperatures. A modified mathematical model is developed based on the shrinkage kernel model, taking into account both mass and heat transport in a hydrogen atmosphere. The effects of temperature, particle size and time on the reduction behavior of the pellets are investigated. The simulated results are validated and discussed by the results of a batch of iron oxide pellets consisting of ten almost spherical pellets subjected to the direct reduction process with pure hydrogen. The results show that the total energy input to the HyDR process is a complex balance of factors, including chemical reaction rates, diffusion dynamics and entropy generation. The increase in free volume and simultaneous decrease in pore diameter reflect the dynamic nature of the microstructure, which includes additional free volume and defects due to the volume discrepancies and associated stresses between the reactant and product phases. Furthermore, the data show that higher temperatures accelerate the reduction reactions, especially the transformation of wustite into metallic iron. This phase transition is characterized by a significant volume change that cannot be accommodated by elastic deformation alone, leading to the development of lattice defects such as cracks, creep pores and dislocations that serve as stress relief mechanisms. The trends for porosity change at 950 °C and 1000 °C observed in the experimental results are correct and in good agreement with the numerical and simulated results.