Ammonia is a promising alternative hydrogen carrier that can be utilized for the solid-state reduction of iron oxides for sustainable ironmaking due to its easy transportation and high energy density. The main challenge for its utilization on an industrial scale is to understand the reaction kinetics under different process conditions and the associated nitrogen incorporation in the reduced material that originates from ammonia decomposition. In this work, the effect of temperature on the reduction efficiency and nitride formation is investigated through phase, local chemistry, and gas evolution analysis. The effects of inherent reactions and diffusion on phase formation and chemistry evolution are discussed in relation to the reduction temperature. The work also discusses nitrogen incorporation into the material through both spontaneous and in-process nitriding, which fundamentally affects the structure and chemistry of the reduced material. Finally, the effect of nitrogen incorporation on the reoxidation tendency of the ammonia-based reduced material is investigated and compared with that of the hydrogen-based reduced counterpart. The results provide a fundamental understanding of the reduction and nitriding for iron oxides exposed to ammonia at temperatures from 500 to 800 °C, serving as a basis for exploitation and upscaling of ammonia-based direct reduction for future green steel production.