In this study, the reduction kinetics and behaviors of oxides in the water-atomized iron powder have been evaluated as a function of temperature ranging $850-1000^{circ}C$ in hydrogen environment, and compared to the reduction behaviors of individual iron oxides including $Fe_2O_3$, $Fe_3O_4$ and FeO. The water-atomized iron powder contained a significant amount of iron oxides, mainly $Fe_3O_4$ and FeO, which were formed as a partially-continuous surface layer and an inner inclusion. During hydrogen reduction, a significant weight loss in the iron powder occurred in the initial stage of 10 min by the reduction of surface oxides, and then further reduction underwent slowly with increasing time. A higher temperature in the hydrogen reduction promoted a high purity of iron powder, but no significant change in the reduction occurred above $950^{circ}C$. Sequence reduction process by an alternating environment of hydrogen and inert gases effectively removed the oxide scale in the iron powder, which lowered reduction temperature and/or shortened reduction time.