Reduction of a low-grade nickel laterite ore with carbon monoxide to produce Fe-Ni alloy was investigated using a thermo-gravimetric analysis (TGA) method. Non-isothermal reduction tests with a fixed heating rate of 10 °C/min from room temperature to 1200 °C were carried out to determine the different reduction stages and reaction products in each state. Combining measured mass losses with theoretically calculated values together with X-ray diffraction analysis, the products of different reduction stages were identified and a reaction path was established. Isothermal reduction tests with temperatures ranging from 500 °C to 1100 °C were performed to evaluate the temperature dependence of the reduction kinetics. Various kinetic models were fitted to the experimental data to further determine the rate-controlling step in the isothermal tests. Then, two groups of TG experiments were carried out to study the effect of CO flow rate and sample mass on the rate of reaction. The results indicated that the reduction rate increases with the increase of the reduction temperature from 500 °C to 1100 °C. More alloy products are formed and the apparent activation energies increase from 8.6 to 14.7 kJ/mol with the increase of the reduction temperature from 700 °C to 1100 °C. Accordingly, it was proposed that diffusion of CO in the gas bulk and through the pores of the laterite ore sample bed are the rate limiting steps.