Mill scale, a potential raw material for recycling from hot rolling mill operations is chosen and one step thermo-chemical reduction technique is employed to beneficiate the iron content in the form of powdered iron. Experiments are conducted at various temperature (600–1300°C) and time (1–4 h) combinations using hydrogen as reducing atmosphere. Physical and chemical properties of mill scale iron powders (MIP) are analysed using particle size analyser, gas pycnometer and wet chemical testing. MIP are also characterized for phase and morphology using X-ray diffractometer and scanning electron microscopy respectively. Effect of parameters like temperature of reduction, time of reduction, particle size of raw material, sintering and grinding on the iron powder synthesis is well studied. Mill scale iron powder with > 99% degree of metallization, 97% Fe (T), > 96% Fe (met) and 2.63 g/cc apparent density is obtained at 1200°C, 4 h and 1300°C, 4 h parameters and this material would stand promising for recycling through nutrition supplements, body warmers, water purification, sound insulators, etc applications.