In this study, isothermal-temperature gradient method was used to separate iron and alumina in lateritic iron ore as an alternative technique. The lateritic iron ore was ground to obtain grain size of less than 200 mesh and agglomerated in the form of cylindrical briquette using a press machine. The iron oxide in the briquette was reduced by addition of coal so that all surface of the briquette was covered by the coal. The temperature profile for the reduction process of the briquette was divided into three stages: the first stage was isothermal at 1000°C, the second stage was temperature gradient at varies heating rate of 5, 6.67 and 8.33°C/minutes from 1000 to 1400°C, and the final stage was isothermal at 1400°C. The effect of dehydroxylation of lateritic iron ore was studied as well. Aluminum distribution inside and outside the briquette was analyzed by scanning electron microscope with energy dispersive spectroscopy (SEM-EDS). The analysis results showed that the aluminum content increased from 8.01% at the outside of the briquette to 13.12% in the inside of the briquette. On contrary, iron content is higher at the outside of the briquette compared to that in the inside. These phenomena indicated that aluminum tends to migrate into the center of the briquette while iron moves outward to the surface of briquette. Furthermore, iron metallization of 91.03% could be achieved in the case of without dehydroxylation treatment. With the dehydroxylation treatment, iron metallization degree was increased up to 95.27%.