Microwave pretreatment of gold-bearing sulfides in an inert atmosphere has served as a promising technique to improve the extraction of gold. However, the complex decomposition mechanism of gold-bearing pyrite under microwave irradiation has not been completely clarified. This study employs in-situ and ex-situ X-ray diffraction (XRD), transmission electron microscopy (TEM), and X-ray photoelectron spectroscopy (XPS) to investigate the phase transformation and sulfur conversion during microwave pyrolysis of gold-bearing pyrite. The removal of sulfur from gold-bearing pyrite caused a significant change at about 600 °C with an activation energy of 223.02 kJ·mol−1. The phase transformation during in-situ heating of gold-bearing pyrite occurred at 500–600 °C, and the crystal lattices underwent thermal expansion along the c-axis direction. Under microwave irradiation, iron (Fe) and sulfur (S) atoms in pyrite rearranged themselves to form different types of pyrrhotite in space groups P31 and P63/mmc, and the symmetry of crystal structure became disordered. After microwave pyrolysis, the formation of polycrystalline aggregates consisting of nanoscale pyrrhotite and unreacted pyrite was confirmed in the TEM study. Microwave-induced hot spots should be responsible for the appearance of numerous holes inside mineral particles. Additionally, the sulfur in pyrite (S22− and Sn2−) was converted to monosulfide (S2−) in pyrrhotite and elemental sulfur (S0), potentially reducing air pollution caused by exhaust emissions. This work provides further insights into the decomposition mechanism of gold-bearing pyrite in the microwave field, and it may help advance the application of microwave pretreatment under inert atmospheres in gold extraction.