The complex oolitic structure of high‐phosphorus iron ore (HPIO) poses a major challenge to dephosphorization, restricting its high‐value utilization. This study proposed a carbothermal smelting reduction process to simultaneously extract and enrich Fe and P from HPIO into a valuable Fe–P alloy. Thermodynamic calculations demonstrate that Fe and P are preferentially reduced and the increase of C/O ratio contributes to the enrichment of P, C, and Si elements in molten iron phase. Reduction experiments confirm that the oolitic structure begins to be destroyed at 1000°C and a high temperature above 1400°C is essential for the separation of iron and slag. After smelting reduction at 1600°C and C/O = 1.0, a Fe–P alloy containing 1.33 wt% P was obtained with high recovery rate of 96.24% for Fe and 86.94% for P. Kinetic studies derived from thermogravimetric analyses reveal that the carbothermal reduction of HPIO is governed by rate‐limiting steps: (1) interfacial chemical reaction dominates below 725°C; (2) gas diffusion becomes limiting at 835°C–890°C; and (3) interfacial chemical reaction reemerges as the limiting step above 1000°C. These findings provide fundamental insights into the reduction of HPIO and offer a promising route for the high value utilization of HPIO.