The carbothermic reduction of Panzhihua ilmenite with activated carbon in vacuum was investigated by isothermal experiments over the temperature range of 1473–1773 K. The reaction mechanism of the impurity elements in vacuum was investigated by X-ray diffraction (XRD), scanning electron microscope (SEM) and thermodynamic calculation. It was found that when the reaction temperature was higher than 1673 K and the reaction time was longer than 4 h, the main phases of the final products obtained at 10 Pa were Fe and TiC, without the presence of MgO and MgAl2O4 which existed when roasting at 1 atm in argon atmosphere. The contents of Mg and Mn in the products decreased with increasing the reaction temperature or lowering the pressure. After the carbothermic reduction process, the main impurity elements of Si and Al were dissolved in the iron.