Carbon monoxide reduction of (Fe,Al)(2)O-3 was carried out in order to clarify the possibility for ODS to be made by selective reduction of solid solution. The microstructure of reduction product was obserrved with XRD, SEM and EDS. The results are summarized as follows. The precipitate particle of about 100nm was observed in iron reduced by 97%CO-3%CO2 at 1273-1373 K and was identified as kappa'-Al2O3. On the other hand, the precipitate particle was Fe(Fe,Al)(2)O-4 of spinel structure by using low reducing potential gas of 80%CO-20%CO2. The size of their particle was more than 200nm. And then, the sequential reduction of (Fe,Al)(2)O-3 by various CO-CO2 ratios at 1273 K was carried out to investigate the structure tranformation of products during CO reduction. Solid solution of (Fe,Al)(2)O-3 was reduced to solid solution of Fe3O4(FeOAl2O3). When the iron oxide was reduced to 'FeO', the Fe3O4(FeOAl2O3) was transformed to 'FeO' and Fe(Fe,Al)(2)O-4 of spinel structure with the irregular shape. The solubility of Al2O3 in 'FeO' was less than 1%. It seemed that the size of Al2O3 particle in reduced iron depends on the that of Fe(Fe,Al)(2)O-4 particle in FeO, which was affected by reducing potential.