Reduction of iron ore-coal composite pellets in multi-layers at rotary hearth furnace (RHF) is limited by heat and mass transfer. Effect of various parameters like pellet shape, size, and bed packing material that are supposed to influence the heat and mass transfer in the pellet bed, have been investigated, on the reduction behaviour of iron ore-coal composite pellets at 1250 degrees C for 20 min in a laboratory scale RHF. Reduced pellets have been characterised through weight loss measurement, estimation of shrinkage, porosity, and qualitative, quantitative phase analysis by XRD. A significant difference in the degree of reduction is observed layer-wise in the pellet bed with the variation in pellet shape and size. Pellet bed without any packing material or packed with coal have demonstrated higher degrees of reduction compared to the pellet bed packed with graphite and sand.